Loading...
HomeMy WebLinkAboutA Delphi Forecast of Alaska's Development the Year 2000 & Beyond 1983Alaska Energy Authority LIBRARY COPY ENE 075 c.2 A DELPHI FORECAST OF ALASKA’S DEVELOPMENT: THE YEAR 2000 & BEYOND Report to DEPARTMENT OF COMMERCE & ECONOMIC DEVELOPMENT STATE OF ALASKA A DELPHI FORECAST OF ALASKA'S DEVELOPMENT: THE YEAR 2000 & BEYOND Report to DEPARTMENT OF COMMERCE & ECONOMIC DEVELOPMENT STATE OF ALASKA BILL SHEFFIELD, GOVERNOR RICHARD LYON, COMMISSIONER For more information about the Delphi Report: Division of Finance and Economics Alaska Department of Commerce and Economic Development Pouch D Juneau, AK 99811 (907) 465-2079 Prime Contractor: ALASKA PACIFIC UNIVERSITY Project Director: GEORGE A. GEISTAUTS Consultant Team: THEODORE G. ESCHENBACH GENE P, RUTLEDGE RAGHBIR §S. BAS! KAREN S. YAWORSKI ANCHORAGE, ALASKA JUNE 1983 Reprinted January 1984 Coe eee ac na a i eta ee eS SE A OEE PIS SN Ee RT RT ES SC ARE ACKNOWLEDGEMENT This study was made possible by the dedication and patience of the members of the Delphi Panel listed below. It is their collective knowledge and insights that form the basis of the predictions outlined in this report. DR. VERA ALEXANDER ROBERT ATWOOD G. “SAM” BEST ALVIN O. BRAMSTAED, JR. DR. MAX BREWER EUGENE BROWER WILLIAM CHABOT FRED CHIEI BILL COGHILL DENNIS COOK JOHN COOK MARY LOU COUCH JOHN DAPCEVICH DR. T. NEIL DAVIS GEORGE DAY H. NOBLE DICK E, “GENE” DICKASON CHARLES H. DICKEY LARRY DINNEEN DICK DWORSKY GEORGE EASLEY PAULA EASLEY KENT EDWARDS DR. RICHARD ENDER TOM FINK WALT FURNACE RON GARZINI O.K. “EASY” GILBRETH DR. O. “SCOTT” GOLDSMITH LLOYD HAMES THE DELPH!| PANEL GOVERNOR JAY HAMMOND C.C. “CHUCK” HAWLEY DAVID HEATWOLE R. DAVID HERRNSTEN DR. ARTHUR HIPPLER LLOYD HODSON BARNEY HOLLEMBACK ROY HUHNDORF CELIA HUNTER DAVID HUTCHINS LINDA LORD JENKINS LELAND A. JOHNSON DENNIS JUREN GEORGE KRUSZ MARK LEWIS BRYON MALLOTT JOE MARKS AMOS “MO” MATTHEWS GOVERNOR KEITH MILLER ERNST MUELLER DR. CLAUS M. NASKE MARK NEWELL PAUL NORGAARD DR. PAT O'BRIEN DR. GLENN OLDS DR. DEAN OLSON JOHN O’NEILL WILLIAM PARGETER WALT PARKER DON PENNER LLOYD PERNELA WILLIAM R. PERRY THOMAS R. PETERSON BLAINE D. PORTER DR. PETER PROBASCO DICK RANDOLPH BILL RAY DR. DAVID REAUME ROBERT W. RETHERFORD ROBERT RICHARDS BRIAN ROGERS ILENE SACKETT ROBERT SANDERS JOHN W. SCHAFFER HAROLD SCHMIDT THOMAS R. STAHR ARLISS STURGELEWSKI ERIC SUTCLIFFE ROBERT SWETNAM LOWELL THOMAS, JR. PEG TILESTON FRANK TURPIN ARLON TUSSING JOSEPH USIBELLI ANTHONY “TONY” VASKA RICHARD WEAVER DR. TUNIS WENTINK LEW WILLIAMS DON WOLD DR. WILLIAM R. WOOD HON. DON YOUNG TABLE OF CONTENTS Executive Summary Chapter 4 Introduction Chapter 2 Methodology Chapter 3 External Influences Chapter 4 Issues and State Policies Chapter 5 Alaska’s Future Economy Chapter 6 Population Chapter 7 Major Events Chapter 8 Energy Supply and Demand Chapter 9 The Rural Alaska Viewpoint Chapter 10 Alternative Scenarios Appendix A The Delphi Panel Appendix B The Delphi Questionnaires LIST OF FIGURES Now Title Page E-1 Relative Growth of Some Economic Sectors......+++++EXEC-4 E-2 Economic vs. Population Growth Rates....+eeeeeeeeeEXEC-5 E-3 Future EventS..ccccccccccsccccccvccccccceccceeees sEXEC=7 1.1 Delphi Research Design...cecececcccccccccscccvcesvcsel2 2.1 Expertise SCalTC..scsccccceccccecccececscssssvscsseee send 2.2 Desirability Scalesccccsccccccccnvcccscccscccsesseessand 2.3 Contents of the First Round Questionnaire.....++..++.2-6 2.4 Contents of the Second Round Questionnaire.....+.+++-2-7 2.5 Contents of the Third Round Questionnaire......+++++-2-8 2.6 Panel Structure by ROUNd....cceccscccccccccccceeeeeeea-ll) 2.7 Project Team Members....sccccccceccescsccsccscesseeseorll 2.8 Project SChedUlC....cccccccecccccccccceccccesesssseseanl2 2.9 I] lustration of Descriptors....cccccceccccccceccsseee2n13 3.1 Oil Prices from 1983 to 2000.......cccccceccceceeeeeedn3 3.2 ‘Probability That World 011 Prices Double...........+.3-4 3.3 Panel Predictions of External Developments.....++++++3-5 4.1 Relative Roles in Alaska's Development...ceeccceceee 4-2 4.2 Reactions to Economic and Policy Hypotheses....eeeee-4-3 4.3 Major Alaskan ISSUCS....cssececcccccerceccceccsesesse4a5 4.4 Land ISSueS.cccccccccccccccccccccccccccccccccsssecess4aG 4.5 Development Issues and Problems...cccccceceecccceeessdal 4.6 State Economic Growth Policyscccccccccccccccccccceeee4a9 4.7 State Budget and Permanent Fund....scceeceeecesseees 4-10 4.8 State GoalS.cccccessccccccccccccccccccccccsscccssersehal lh 5.1 Total Size of the Alaskan Economy......ssssscceeeeeesd-3 §.2 Major Factors in Economic Growth...cecesceeeeeesseeesdn3 5.3 State Government Actions Encouraging Development.....5-4 5.4 State Support for Industries/Resource AreaS.....++++-5-5 5.5 Economic Sector ForecaStS...esscsccceccccccecceceees 20-6 5.6 Relative Sector SizZ@.sccccccscccccccccccecccsceveses sda] 5.7 Relative Growth. ..seeeeeeeeeeeeeeseeeeseeeseseeeeeneebal 5.8 Potential Resource MarketsS....sseccccccccccecscceeessd~9 5.9 Probable Use of North Slope GaS...sssecceecececeeees d= 10 List of Figures (continued) Now Title Page 5.10 North Slope Gas: Transportation or Use...eeeeeeeeeeeed-ll 5.11 Possible New Industries....cccccssccccccccccvccceeesod“12 5.12 Alaska Business Climate.......cccccccccccccccccceee eed l3 6.1 Major Factors in Population Growth.....sseeeeeeeeeeee6-2 6.2 Panel Forecasts of Population Growth Rates..........6-3 6.3 Alaska & U.S. Population Growth Rates.....eeeeeeeeeee6-3 6.4 Panel Forecasts of Population LevelsS....seeeeceeeeees 0-4 6.5 Population LevelS...seeeeecccccccccccccccccccscsseessln4 6.6 Population Distribution by Region....sseeeeseeeeeeee e6-5 7.1 Most Likely Event Time Predictions.....ccccccscsceeees—4,5 7.2 Detailed Event ForecastsS..ccccccccccccccscsccvcccseee 859510 7.3 Panel Ranking of Event Desirability..-.scccecccceeeee =I1512 7.4 Paired Event Occurrence Cross-Impacts...escecceeeeeees 14 7.5 Lags Between Events... .secceccccccccccccccccccscssee 15 7.6 Second Wave ProjectsS..ccccccccccccccccccccvccccseeess 16 8.1 Major Energy Related Events.....esscccccccccccccceeseS—3 8.2 Trends Affecting Energy Demand...sssecccesecceescees B-4 8.3 Detailed Breakdown of Fuels for Power....eececceeeee 8-5 8.4 Sources of Energy for Electric Power..seceeseceveeee 8-6 8.5 Power Generation with Alternative FuelsS.....eceeeeee 8-7 8.6 Fuel Use for Space Heating.....secsscccccccccccccsessd-/ 9.1 Rural Communities Visited by the Delphi Project Team.9-3 9.2 Percentage of Panel Ranking Rural Problem Areas as Most Important..ccccccccccccccccccccccccccsseeseeees edad 9.3 Percentage of Delphi Panelists Indicating By What Time (If Any) The Thirteen Rural Problems Might Be SOLVEd. cece eccccccccccccccsccccccceccccevcseceee se 0I—6 9.4 Solutions to High Energy CostsS....ccescccccccceeeeeeeIll 9.5 Changing Energy Cost SolUtiOns...csecsecceccecceeeee eG ll 9.6 Actions or Roles of the Native Corporations......++-.9-12 10.1 Energy Plan Scenari0S...cecceceeees see cccccceeeceeeelO-1,2 10.2 Scenario ComparisonS..ccccscccccccccccccccescccesseelO-10,11, 12,13 EXECUTIVE SUMMARY EXECUTIVE SUMMARY INTRODUCTION This report presents predictions about Alaska's future development. The pre- dictions were obtained from a panel of over ninety distinquished and expert Alaskans using the Delphi forecasting method. The study was performed under contract to Alaska's Department of Commerce and Economic Development, with the active research phase extending from December 1982 through April 1983. METHODOLOGY The Delphi Method Delphi is a technique for systematically combining individual expert opinions elicited from members of a carefully selected panel. The method utilizes a series of structured questionnaires mailed to panelists, combined with feedback of interim results to panel members. Panelists are thus made aware of emerging panel positions, including areas of significant consensus or lack of consensus. The Delphi method has many of the advantages of a high level conference without the disagreements, strong personality influences, and logistical problems asso- ciated with putting together such a gathering. Delphi is also particularly effective in identifying breakthrough and turning point events. The Panel Prospective Delphi panelists were selected based on their membership in one or more of the categories of decision maker, technical expert, or advocate, and on their contribution to maintaining a regional balance for the panel. An original list of over 300 highly qualified candidates was reduced to a balanced list of approximately 180; of those invited 108 accepted and 91 participated in one or more rounds. The panel included past governors, legislators, government agency directors, local government officials, industry executives, Native leaders, university professors, and advocacy group representatives. The Questionnaire Rounds Three rounds of questionnaires were forwarded to panel members. The focus of the questionnaires was on long-term economic, resource, and energy issues, as opposed to short-term developments, with panelists predicting outcomes for the years 1990, 2000, and 2020 or beyond. Questionnaires averaged 20 pages in length, and altogether panelists were asked to evaluate over 800 distinct items or questions. EXEC-1 RESULTS External Influences on Alaska Panelists were asked to predict developments external to Alaska because Alaska's future is strongly affected by national and international influences, and panel- ist's beliefs as to which external developments will occur clearly affect their predictions of Alaskan events. The following general observations summarize the panel's position: Over half of the panel expects oil prices to rise substantially above the current level in the long run, with a third of the panel expecting a doubling in prices by the year 2000 (most of the panel finds this increase unlikely). Over half the panel expects oil prices to continue to drop in the short run. A major relaxation of environmental quality regulations in the U.S. is unlikely. A major U.S. emphasis on energy and mineral independence jis more prob- able than improbable. Panelists are roughly split on the probability of Congress imposing substantial taxes on resource producing states. Issues and State Policies Key questions in developing a forecast for the next forty years are "What issues will dominate the formation of State policy?" and "What actions will result?" The panel's position on issues, policies, and State actions was: In a broad sense, development will be the major issue facing State policy makers over the next twenty years. State government has, and will have, the largest role in Alaska's economic development; the role of the private sector is expected to increase, while the role of the federal government decreases. In relative terms, the State will exercise 37%, the private sector 34%, and the federal government 29% of the total influence over Alaska's development. However, when asked about resolution of a number of specific develop- ment issues, the panel, in most instances, assigned to the private sector the major responsibility for resolving the issue. The State was assigned the major role for assuring cheap and abundant electric power, determining optimal land use, protecting the environment, and providing transportation to resource sites. EXEC-2 The State will pursue a moderate course balancing growth and lifestyle/ environmental preservation; State policy will follow a moderate growth path through a sequence of large-scale projects. Only a quarter of the panel expects the State to pursue a high economic growth pattern with its possible risk to the lifestyle and environment, and only a sixth expects a low growth approach in State policy. The panel expects State qoals to emphasize the rate of growth, and the panel would prefer goals emphasizing economic stability. Transportation and access corridors, and what Natives will do with their land are the two most important land issues. Alaska's Future Economy Although virtually all panel predictions have an economic implication, the following specific economic predictions were made by the panel: The Alaska economy (in constant 1979 dollars) will. reach $20 billion by the year 2000; this implies an average compound annual growth rate of 2.9%. The most likely disposition of North Slope gas is a pipeline to tide- water, with a 50% probability that the gas will be exported. The gas is likely to reach the market between 1992 and 1995. A Canadian pipe- line or re-injection are, roughly, equally likely secondary alterna- tives. Mineral and energy resources, Pacific Rim access, and renewable resources will be major factors encouraging growth; high development or production costs, lack of infrastructure, and low resource prices will be the major factors discouraging growth. Raw material availability, Pacific Rim relationships, energy avail- ability, State loan programs, and the quality of life are among the most positive aspects of the Alaska business climate; environmental regulations, Alaska market size and characteristics, labor unions, and permit process requirements are among the most negative. Expanding transportation infrastructure, providing inexpensive power, increasing financial incentives, and coordination/planning are among the most important, and most likely State actions to encourage development. The Pacific Rim - U.S., Japan, Korea, and other Asian countries - will be the main markets for most of Alaska's natural resources; Europe is unlikely to become a strong market. The most likely industries to receive strong State support are fisher- ies, oil and gas, tourism, and coal development. EXEC-3 @ Coal, hard rock mining, fisheries, and tourism are predicted to exhibit strong growth; timber is predicted to grow only moderately; and slow growth is predicted for agriculture. % GROWTH % RELATIVE TO 1980 LEVELS 300% _-7 MINING 250% -" == COAL, TOURISM 2.00% 150% 100% 50% 1980 1990 2000 2010 2020 YEAR FIGURE E-1 RELATIVE GROWTH OF SOME ECONOMIC SECTORS @ Communication technology and computers that make working (living any- where - or at long distances from economic activities) feasible could alter work and life patterns in Alaska. Population The population level of Alaska is both a key result of and a driving force behind economic trends; population and the State economy are linked in an end- less feedback loop. The panel predicted that: @ The population level of Alaska will increase at a growth rate about three times that projected by the Census Bureau for the rest of the United States over the next forty years, but these rates will be below those Alaska has grown at over the last thirty years. e@ The most likely average Alaska population growth rates will be 2.50% per year from 1980 to 1990, 2.09% from 1990 to 2000, and 1.50% from 2000 to 2020. These rates imply most likely population levels of 515,000 in 1990, 633,000 in 2000, and 852,000 in 2020. @ Although all regions of the state will be growing in population, the Railbelt, and Anchorage in particular, will be growing at the most rapid rate; this will cause a small shift toward the railbelt in the relative regional population distribution percentages. EXEC-4 @ Anchorage's population will most anaes reach 225,000 in 1990, 300,000 in 2000, and 350,000 in 2020. GROWTH FIGURE E-2 Major Events + 0% ~5% + 0% + 0% 5% KEY! ECONOMY — ———— + 5% POPULATION @==Eee 5% POPULATION — ae ee ee 3=ECONOMY 1980 1990 2000 2010 2020 ECONOMIC VS, POPULATION GROWTH RATES Alaska's history and projected future are often characterized in terms of major "events" that alter - often permanently - the course of Alaska's development. Among the predictions by a majority of the panel: and 2000. Permanent shutdown of the Trans-Alaska pipeline will not occur before the year 2030. North Slope oil is likely to be shipped to Japan by the late 1980's. Commercial production of Beluga coal will occur in the early 1990's. The first Susitna dam is likely to go on line between the years 1995 The second dam will follow 8 to 13 years later. EXEC-5 APPROXIMATE MOST - PROBABLE TIME RANGES FOR EVENTS COMPARATIVELY UNLIKELY EVENTS COMPARATIVELY LIKELY EVENTS YEAR 1987 NORTH SLOPE OIL TO JAPAN | STATE INCOME TAX RE- IMPOSED ison QUARTZ HILL MINE IN PRODUCTION NORTH SLOPE GAS REACHES MARKET | BOTTOMF ISHING MAJOR INDUSTRY 1995 BELUGA COAL PRODUCTION STARTS KNIK ARM CROSSING FIRST SUSITNA DAM ON-LINE NEW MAJOR MINE _ IN BROOKS RANGE ALASKA EXEMPTION FROM JONES ACT MAJOR BERING SEA OIL PRODUCTION CAPITAL MOVES FROM PETROCHEMICAL PLANT JUNEAU ALASKA RR TO BROOKS RANGE ALUMINUM PLANT NO LONGER BOOM/ BUST ECONOMY ALASKA BECOMES MAJOR AGRICULTURAL EX- PORTER ALASKA RR LINKED TO REST OF U.S. SECOND SUSITNA DAM ON LINE ROAD CONNECTS NOME TO RAILBELT | STATEWIDE POWER GRID SYNFUEL PRODUCTION | LARGE SCALE MARINE MINING 2020 ALASKA POPULATION | PEAKS. 2025 2030 TRANS -ALASKA OIL PIPELI I Shut BSN —_ BEYOND FIGURE E-3 FUTURE EVENTS EXEC-6 DOUBLING OF ON-SHORE FISH BL ING 9h E PROCESS ING REGIONAL RURAL ELECTRIFICATION GRIDS Bottomfishing will be established as a major industry by the early 1990's. Alaska is never likely to become a major exporter of agricultural products. At least one, new large scale mine will be operating in the Brooks Range by the mid 1990's. The Alaska Railroad has a 50-50 chance of being linked with the rest of the United States. The Knik Arm Crossing will be completed by the late 1990's. The State personal income tax is likely to be re-imposed as early as 1987 and before 1992. The Capital is unlikely to move from Juneau. Energy Supply and Demand The following general observations summarize the panel's position on in-state energy supply and demand: Energy for Alaskans was considered to be a major Alaskan issue by approximately a third of the panel. Among the 26 specific development issues “assuring cheap and abundant electric power" was ranked sixth in current importance and seventh in importance in the year 2000. In assigning relative private sector/State responsibilities, "assuring cheap and abundant electric power" had the highest percentage of responsibility assigned to the State of all specific development issues. Almost half of the panel felt that providing stable and inexpensive power was one of the three most important actions the State could and would undertake to encourage economic development. 75% of the panel expects Susitna to be built, with a median completion date of 1994 for the first dam. The panel assigned the highest likelihood to a "pipeline to tidewater" for use of North Slope gas, although a quarter of the panel believes continued re-injection or use in enhancing oil] recovery is the most likely use. Energy systems that are costly and difficult to maintain were consid- ered to be the second most critical problem area for rural Alaskan communities. In general, panelists did not expect this problem to be fully resolved before the year 2020. EXEC-7 Regional electrification grids will be in use to cope with high rural fuel oil costs shortly after the turn of the century. The Rural Alaska Viewpoint Each of the three Delphi rounds contained questions that focused on rural Alaska or the Native Corporations. The three formal rounds were also supplemented by structured interviews conducted in five Alaska rural communities. The intention of these interviews was to obtain the views of those Alaskans who are more familiar and comfortable with an oral tradition than with written questionnaires. The results of those interviews were juxtaposed against the views of the formal Delphi panel: The majority of those interviewed see development taking place at a controlled pace with particular emphasis on the protection of the environment and the subsistence harvest. Most areas do not appear to want industrial "staging areas" in their communities. Many stated that they wish the State to provide the infrastructure and/or initial subsidies necessary to make certain marginal projects immediately viable, but to constrain the projects in terms of location, pace, and pattern of implementation. When questioned about what each saw as the most significant problem in their village, region, or in the whole of rural Alaska, the major- ity identified housing, employment opportunities, energy systems, and the cyclical economy. Formal Delphi panelists concurred. When asked about solutions to high rural energy (fuel oil) costs, the majority of the Delphi panel predicted in 1990 the approaches would be better insulation, price subsidies, and substitution of other energy sources; by the year 2000 the majority predicted that substitution, regional power grids, and new technology would be the approaches used. When asked about the actions or roles of Native corporations, the majority of panelists indicated that, in general, Native corporations would open (lease or sell) their land for development, continue to be controlled by Natives and be a unified political force. Panelists also indicated that the Native corporations would not emphasize Native cultural values over economic performance when the two conflict. EXEC-8 Scenarios In the second round, panelists were asked to indicate which of three alternative scenarios came closest to what they perceived to be the Alaska of the future. The large majority indicated that a moderate growth scenario, where Alaska's natural resources are developed on a project by project basis without drastic- ally changing the lifestyles of most Alaskans, was the most likely. Analysis of third round responses, where panelists had specifically been asked to think in terms of individual "scenarios" shows that the largest single group of panelists made predictions compatible with a "moderate" population growth scenario in which Alaska's population grows at an average annual rate of 2.5%/ year in the 1980's, 2.0%/year in the 1990's, and 1.5%/year from the year 2000 to 2020. EXEC-9 O10. O07 OO CHAPTER 4 INTRODUCTION FORECASTING OBJECTIVES DELPHI RESEARCH DESIGN THE DELPHI PANEL RESEARCH PROCEDURES ORGANIZATION OF THE REPORT KY Chapter 1 INTRODUCTION The discovery and development of Alaska's North Slope oil. reserves has unques- tionably led to a period of unprecedented growth and change for the state. Alaska's population has increased by more than 50% since 1970, and several bil- lion dollars of oil-derived revenues enter the state's economy each year. New wealth has been accompanied by new expectations, new opportunities, and new problems. Alaskans are concerned about preserving and extending their new prosperity into the future, and channeling the pattern of growth so that it pro- duces maximum benefits with minimum harmful effects. Both the traditional role of state government in providing public services and its unique role in Alaska as a conduit of oil revenues into the state's econ- omy require that it engage in strategic thinking and long range planning. In order to do long range planning, however, the State must forecast probable future trends and events which could affect resource development and economic growth. In the case of Alaska, because of international developments, changes in national attitudes and federal policies, and key decisions made by Alaskans themselves, such forecasting cannot simply extend present trends. In effect, forecasting many significant aspects of Alaska's future can best be done through the use of individual - often intuitive - insights. To accomplish this end, the Department of Commerce and Economic Development (DCED) sought consultant support to: "Conceptualize, implement and report on a Delphi-type study of Alaska's energy, economy and resource development future, separating very clearly what panelists "expect from what they 'prefer'...'Bush constituencies' should be equi- tably represented along with other key constituencies '... the goal is to improve the understanding of the likelihood that major strategic events will or will not occur and to separately determine preference for these results. The study must be objective and apolitical." Delphi, the method chosen for the study, is a technique for systematically combining individual expert opinions elicited from members of a carefully selected panel. The method utilizes a series of structured questionnaires mail- ed to panelists, combined with feedback of interim results to panel members. Panelists are thus made aware of emerging panel positions, including areas of significant consensus or lack of consensus. (The Delphi method is discussed more fully in the next chapter.) The procedure followed by the consultants (see Figure 1.1) was to develop a detailed design for the study, to form an advisory group for guidance in identifying issues and potential panel members, to recruit an expert panel, to conduct structured oral interviews in rural Alaska, and to develop and administer three rounds of structured written questionnaires: e@ ROUND 1 focused primarily on obtaining a broad overview of Alaskan development as seen by the panelists. Panelists were asked to forecast economic growth, key event timing 1-1 Figure 1.1 DELPHI RESEARCH DESIGN DELPHI CONSULTING DELPHI PANEL TEAM FORMULATE PROBLEM DESIGN PANEL MEMBER ACCEPTANCE FIRST QUESTIONNAIRE PANEL RESPONSE STRUCTURED VILLAGE INTERVIEWS COMPILE ANSWERS SECOND QUESTIONNAIRE PANEL RESPONSE PANEL POSITION COMPILE ANSWERS CONVERGENCE THIRD QUESTIONNAIRE COMPILE ANSWERS FINAL REPORT 1-2 PANEL RESPONSE and probabilities, and major external developments impor- tant for Alaska. Panelists were also asked to identify those issues having the highest significance for Alaska's development. e ROUND 2 focused on refinement of the population, economic, and event forecasts, and on further evaluation of key issues. It provided as feedback economic, energy, population, and event forecasts based on first round panel responses, as well as the specific issues identified by the panel as being most significant. Each panelist's individ- ual first round population forecast was also incorporated into the feedback in a format facilitating comparison with the panel position. e@ ROUND 3 focused on developing an integrated most probable "scenario" of Alaska's future, with panelists specifically being asked to consider the interaction of trends and events. For most questions panelists chose from a "menu" of probable alternatives based on the results of the first two rounds, but panelists could also add their own individ- ual alternatives. An extensive feedback section of pre- vious round results was included as part of the question- naire. The focus in the questionnaires was on long-term as opposed to short-term developments, with panelists predicting outcomes for the years 1990, 2000, and 2020 or beyond. Copies of the complete questionnaires can be found in Appendix B of this report. Prospective Delphi panelists were selected based on their membership in one or more of the categories of decision maker, technical expert, or advocate, and on their contribution to maintaining a regional balance for the panel. An original list of over 300 highly qualified candidates was reduced to a balanced list of approximately 180; of those invited 108 accepted, and 91 participated in one or more rounds. The names of the participating panelists are listed in the "Ack- nowledgement." The panel included past governors, legislators, government agency heads, local government officials, industry executives, Native leaders, univer- sity professors, and advocacy group leaders. Brief panel member biographies are given in Appendix A. The first questionnaire included 18 pages of instructions and questions; the second was 21 pages long, and the third also 21 pages long, including seven pages of feedback from earlier rounds. Altogether, panelists were asked to eval- uate or respond to over 800 distinct items or questions. Conversations with panelists indicate that each questionnaire typically took several hours to com- plete. The collective panel response represents at least 500 hours of effort by the panel members. The first questionnaire was mailed to panelists in mid-December 1982, the second nine weeks later, and the third four weeks after that. Data analysis was com- pleted in late April 1983. In addition to the written questionnaires sent to 1-3 panelists, the Delphi consultant team conducted structured oral interviews in five rural Alaska communities. The communities visited were McGrath, Ft. Yukon, Hoonah, Toksook Bay, and Barrow. The purpose of these interviews was to ensure that rural Alaskan viewpoints as to future trends were represented in the study and to check the validity of panel responses as they applied to rural Alaska. The Delphi consultant team received guidance in identifying the development questions and issues to be explored and recommendations on candidates for the Delphi panel from the Delphi Working Group, which was composed of: William H. Beardsley Director, Division of Energy and Power Development Ralph Howes Chief of Energy Assessment and Planning, Division of Energy and Power Development Millett Keller President, Millett Keller Com- pany Susan Knowles Commissioner, Alaska Public Utilities Commission Judith Marquez Director, Alaska State Division of Parks Charles R. Webber Commissioner, Department of Commerce and Economic Develop- ment (Hammond Administration) Dr. Robert Weeden Professor, Resource Management Division - University of Alaska, Fairbanks This report summarizes the most significant results of the study. No attempt has been made to reproduce here an exhaustive tabulation of all project data, nor to explore every possible cross-tabulation of results; that would require several volumes and months of analysis. Rather, the focus is on key result areas and clarity of presentation, in order that the report can serve as an effective reference for those engaged in long range planning and analysis of Alaska's future. However, the report itself is not a plan, and there is no intention on the part of the consultants to imply here that a particular future path should be followed by Alaska. The intention is to report, but not to judge, the panel's predictions and preferences; for that reason interpretative comments on the results have been held to a minimum. Because Delphi panelists are assured confidentiality for their individual posi- tions, this report also does not identify any specific responses with any specific panelist. Thus, the reader has to judge the predictions reported here on their own merits, and not in terms of the personalities of panel members; 1-4 this is generally considered, by professional forecasters, to be one of the strong points of Delphi. In interpreting the results, the reader should keep in mind the fundamental objectives of the study and the basic limitations of the Delphi method. Delphi is not a method which focuses on statistical accuracy as the research criterion; rather, it seeks to identify areas of broad agreement or disagreement about probable future developments. Nor does Delphi focus simply on the extrapolation of current trends into the future; rather, it focuses on trend breaking events, their timing, and their probability of occurrence. Delphi starts at the point where classical techniques of mathematical and economic modeling fail because they cannot deal with turning points and major discontinuities in trends. This is particularly true for events and developments whose occurrence is, to a great extent, a function of social and political factors, or that are due to techno- logical breakthroughs. The next chapter of this report discusses the Delphi methodology in more detail and indicates specifically how it was applied in this study. Subsequent chap- ters present the principal results classified in the following categories: developments external to Alaska, Alaskan issues, the Alaskan economy, Alaska's population, key events in Alaska's development, energy, and rural (bush) issues. The final chapter looks at alternative development scenarios, and thus provides an integrated view of the study's results. 0-0, OF D700 5.0 CHAPTER 2 METHODOLOGY THE DELPHI METHOD DELPHI IMPLEMENTATION QUESTIONNAIRE DESIGN PANELIST SELECTION AND RETENTION PROJECT ADMINISTRATION AND SCHEDULE STRUCTURED VILLAGE INTERVIEWS ANALYSIS OF RESULTS INTERPRETATION OF THE RESULTS Chapter 2 METHODOLOGY Any forecasting method has inherent advantages and limitations; furthermore, to meet the specific circumstances of an implementation, the method must be modi- fied. Thus, what emerges is a forecasting methodology that is unique, but that has its roots in an established forecasting approach. This chapter of the report discusses the Delphi method in general, and then describes how it was implemented in this particular forecasting study. THE DELPHI METHOD The Delphi method (named for the oracle at Delphi in ancient Greece) was first developed by the Rand Corporation in the 1950's as a method of systematically combining expert opinions in a procedure free from some of the serious limita- tions of face-to-face meetings. For example, the Delphi process allows experts adequate time for examining and responding to the issues without the wasted travel time and inefficiencies of large meetings. As indicated in Chapter 1, Delphi utilizes several rounds of questionnaires, with each questionnaire including feedback from previous rounds. The process is administered by a research team, whose members are responsible for translating the problem(s) that the sponsor of the study wants investigated into an initial set of questions, identifying and inviting experts to serve on the panel, developing the first and the follow-up questionnaires, distributing and collecting the questionnaires, interpreting interim results and summarizing these results for feedback, and preparing the final report. The research team may be formed exclusively from the staff of the sponsor organization, or exclusively from outside consultants, or by personnel from both; in any case, close consultation between the sponsor and the research team is required to ensure that the sponsor's needs are met as the project progresses. Delphi panelists do not meet face-to-face and normally are not aware of the complete membership of the panel; panelists respond to questionnaires sent to their own individual offices. Anonymity of specific responses is preserved, and neither other panelists nor the sponsor are ever able to identify the specific source of an opinion. Thus, panelists are influenced by the opinion and its reasoning, and not by its source. A typical Delphi research project consists of three to five questionnaire rounds, which are usually conducted by mail. Because of the time required to analyze previous round results and to design the next round questionnaire, lengthy panel member response times (panel experts typically have busy work schedules), and the inherent slowness of the mails, each of these Delphi rounds usually takes over a month to complete. A much faster computer based Delphi methodology is emerging and can be used in cases where all panelists have access to and familiarity with computer terminals. 2-1 Once the research team and the sponsor are convinced that the significant issues and questions have been identified, successive rounds tend to focus on the clar- ification and refinement of the panelists' opinions. The inclusion of feedback from. previous rounds in the questionnaire for the following round allows indi- vidual panel members to be aware of emerging panel positions and to evaluate their own position in relation to the views of the complete panel. The feedback is usually limited to panel positions as a whole, but it may include the indi- vidual panelist's previous responses. In any case, panelists reconsider their position, provide new predictions or estimates, and explain the basis of major differences between their opinions and those of the complete panel. Typically, this produces some degree of consensus, with narrower ranges for the estimated quantities, although several distinct positions may emerge. Consensus is not automatic, however; the panel may be split on a specific issue or pre- diction, and two or more clearly distinct positions may be revealed by further Delphi rounds. When compared to other forecasting methods and in particular to those utilizing expert opinion, Delphi seems to have the following advantages: e@ It can make effective use of expert opinions in a group process. e Large panels-are possible and relatively inexpensive. @ Logistic and cost problems associated with the panelists’ travel are eliminated. e@ Feedback is based on total panel responses, not just the verbal response of a few members as in a meeting. @ Follow-up questions can be designed with great care. @ Anonymity eliminates status and ego problems on the part of the panelists which could bias predictions. @ Because informed opinion rather than mathematical modeling is the basis for prediction, Delphi can deal with breakthroughs and discontinuities. Delphi is not without limitations, however: e@ The process tends to be slow and thus influenced by changing events and trends. e@ High degrees of quantitative precision generally cannot be expected. e@ Problems can arise in maintaining panel membership, as panel attrition rates can be quite high. e A consensus could be manipulated by the research team, or their biases may affect the results. e@ Finally, simply having a consensus does not in itself make the pre- diction more accurate. 2-2 Despite these limitations, Delphi has gained widespread acceptance as a long- range forecasting method, particularly for forecasting technological break- throughs. More recently a variation known as Policy Delphi has emerged; in Policy Delphi the emphasis is on panel evaluation of the desirability of alter- natives and the importance of issues, and not just on prediction of events. There is a temptation to consider Delphi as another survey technique, and to evaluate it and its results according to standard survey method criteria. How- ever, Delphi is really a group communication process and not statistical sam- pling; the panel is chosen for expertise and is in no sense a random sample. In a leading book on Delphi, Linstone and Turoff describe Delphi as follows: "Delphi may be characterized as a method for structuring a group communication process so that the process is effec- tive in allowing a group of individuals, as a whole, to deal with a complex problem." DELPHI IMPLEMENTATION This study used the basic Delphi methodology, with its forecasting emphasis, augmented by some features of Policy Delphi. In addition, a series of structured village interviews was carried out to cross-check those results that dealt with rural Alaska. This section describes the implementation of the methodology. General Questionnaire Design The study's focus was defined by DCED officials and refined in consultation with the advisory Delphi Working Group. From these consultations the research team developed a preliminary set of first round questions; these in turn were modified through a process of literature search, further consultation with DCED, and pre- testing. A similar process was followed for the second and third rounds, except that feedback of previous round results was incorporated into the new question- naires. Because questions covered a wide range of topics and issues, many for- mats were used. For example, panelists estimated population, the size of eco- nomic sectors, the number of years until an event and the probability of an event; they also selected or ranked the most significant alternatives from a list, and they assigned desirability levels . Panelists frequently augmented the listed alternatives with their own individual contributions. In addition, some questions were open-ended and required panelists to write in their own unique response. All three questionnaires ended by asking panelists to comment on the Delphi process itself. In most cases time horizons were standardized at the years 1990, 2000, and/or 2020, although panelists also supplied most probable years for events or exam- ined a time horizon beyond 2020. In the first questionnaire panelists indicated their individual level of expertise for several question areas, and in both the first and second questionnaires they rated the desirability of outcomes. The standard scales used to define expertise and desirability are shown in Figures 2.1 and 2.2. 2-3 Questions which had a desirability rating component separate the panelist's perception of the likelihood of an event from the panelist's preferences, and thus helped to eliminate a major source of possible bias. The first and second round questionnaires included the following statement: "Finally, it is extremely important that, in responding to this survey, you make a clear distinction between what you think will happen, and the desirability of that outcome. The majority oF our questions, in effect, ask you to predict what will happen, and some also ask you to rate the desir- ability." Feedback of previous round results is a key feature of Delphi methodology, but this feedback and the question design should not "force" convergence toward a consensus on predicted events and trends. Such a forced convergence risks a false and misleading conclusion. Thus, the second round (and in a modified form, the third round) included the following instructions: "You ‘alone can decide what weight to give to the panel's combined position in making your own second round response. While it would be desirable to move toward panel consensus by narrowing the range of estimates, there is no desire to force a false consensus. It is quite possible that for some of the questions we are asking, several alternative estimates or predictions are equally valid. We do request, however, that where your estimate falls outside the panel's mid-range, you provide a brief explanation of your reasons for choosing that particular value." Figure 2.1 EXPERTISE SCALE While panelists differ in their level of expertise on different ques- tions, all panelists should respond to every question. Within most of the questions we have included a scale to rate your own level of exper- tise, using the following guidelines: Knowledge or expertise rating scale High Actively involved in decisions, research, or analysis in this area. Medium Informed in this area through reading reports, listening to expert testimony, or conversation with experts. Knowledge or expertise about the same as a well-informed citizen. Figure 2,2 DESIRABILITY SCALE Each respondent will have a personal set of criteria determining desira- bility. Below we have listed and explained the five response categories of the desirability scale, as a general guideline: Desirability rates effectiveness of benefits against relative cost Very Desirable Positive effects far outweigh negative effects or costs. Desirable Positive effects generally outweigh negative effects or costs. No Judgment There is not sufficient information available to you to make a judgment on desirability, or you personally are indifferent. a Undesirable Negative effects and costs outweigh any positive effects. Very Undesirable Negative effects and costs far outweigh any positive effects. Content of the Questionnaires Figures 2,3, 2.4, and 2.5 outline the question areas for each of the three rounds. The full set of questionnaires is reproduced in Appendix B. 2-5 Figure 2.3 CONTENTS OF THE FIRST ROUND QUESTIONNAIRE ROUND 1 asked panelists to: Identify the three most important questions or issues facing Alaska Predict global and national developments affecting Alaska Project future population of Alaska Identify factors encouraging and discouraging population growth Project future regional and Anchorage population distributions Project the total size of Alaska's economy Identify factors encouraging and discouraging economic growth Predict increases or decreases in key economic sectors Rank the likelihood of North Slope gas transportation options Predict when North Slope gas would reach market Predict increases or decreases in each energy source for generation of electricity Predict use of alternative energy sources for power generation Evaluate the Alaska business climate Evaluate economic trends and policies Identify three major land issues Evaluate relative influence of government and the private sector on Alaska's development Forecast the timing and indicate the desirability of 28 events and their probability of occurrence. nN 1 Dn Figure 2.4 CONTENTS OF THE SECOND ROUND QUESTIONNAIRE ROUND 2 asked panelists to: Rank the major issues Rank and assign relative government/private sector responsibility for solving 26 development issues or problems Rank land issues in importance and indicate their solution Re-evaluate government/private sector influence Indicate the most important action state government could take to encourage development Re-evaluate economic sector forecasts Re-evaluate electric power energy source forecasts relative to Susitna project outcomes Re-evaluate North Slope gas options and timing Re-evaluate event forecasts Evaluate and rank probability of three alternative growth scenarios Re-estimate population and rank factors affecting it. 2-7 Figure 2.5 CONTENTS OF THE THIRD ROUND QUESTIONNAIRE ROUND 3 panelists constructed a most probable scenario for Alaska by: Predicting oi] price patterns Predicting state policy toward environment and growth Predicting the major emphasis in the State budget Indicating what will be done with Permanent Fund income Predicting and evaluating State goals Predicting and evaluating State actions relative to development Predicting which industries will receive the most State support Predicting in which markets Alaska's resources will be sold Predicting relative growth of several industries Identifying any "new" industries that might emerge Indicating any major technological developments expected to impact Alaska Predicting years of occurrence for 19 major events with emphasis on their mutual interrelationships Predicting or identifying the "second wave" of projects, or projects currently not widely recognized as important Predicting population growth rates Evaluating and predicting trends affecting in-state energy demand Predicting how bush energy problems will be solved Predicting, by region, relative use of wood, coal, and solar energy for space heating Ranking and estimating timing of solutions of major rural community problems Indicating probable actions of Alaska Native corporations Predicting lifestyle changes Identifying any fundamental political changes with long-term impact on Alaska Evaluating their scenario's desirability. 2-8 Panelist Selection and Retention Panelists were selected through a process of mutual consultation between the consultant team, DCED staff, the Delphi Working Group, and others. Although panelists often fell into more than one category, the panel was constructed using the general categories of decision maker, technical expert, or advocate. Thus, the panel included those in a position to actually change the future through decisions, those highly knowledgeable in technical areas, and those whose primary focus is on preserving or changing values. Criteria for selection included perceived expertise, decision making responsibility, regional balance, government/private sector balance, and a reputation for involvement and concern with Alaskan issues. From an initial list of 300 potential panelists, 180 were invited to join the panel with the expectation that about 50% would accept. The invitations to serve were sent out by Charles Webber, then Alaska's Commissioner of Commerce, in November, 1982. Figure 2.6 summarizes the panel composition in terms of several important categories as it was originally constituted, and also the composition of the set of actual respondents for each round. The relatively low attrition rates indicated by the number of responses at each stage are a tribute to the dedication and patience of the panel. The wide scope of the study required far longer questionnaires than is typical for Delphi; thus a typical panelist spent six or more hours responding to the complete set of questionnaires. Project Administration and Schedule The study was conducted by a consultant team, with Alaska Pacific University serving as prime contractor. Team members, affiliations, and responsibilities are summarized in Figure 2.7 and the project schedule is summarized in Figure 2.8. Structured Village Interviews A series of structured interviews conducted in rural Alaska was included as a cross-check on the written Delphi process. In total, five trips were made; communities visited included McGrath (2/28/83), Ft. Yukon (3/12/83), Hoonah (4/27/83), Toksook Bay (4/28/83), and Barrow (5/02/83). These communities were chosen as representative of different stages and attitudes toward development. They also represented a reasonably balanced geographic distribution. A set of questions was developed as a framework for the interviews, but actual interviews were conducted by interpreting and modifying the list to fit the individual com- munity situation. The interviews in Toksook Bay were conducted by Dr. Ann Fienup-Riordan in the Yupik dialect. Analysis of Results by the Study Team The data was analyzed by coding the individual responses and processing the data with the Statistical Package for the Social Sciences (SPSS) under contract with the University of Alaska Computer Network. In a few instances some ambiguity 2-9 Figure 2.6 PANEL STRUCTURE BY ROUND Accepted ROUND 1 ROUND 2 ROUND 3 umber % Number % Number % Number % 108 100% 91 84% 77 71% 67 62% CATEGORY/ROUND N TOTAL GEOGRAPHIC :* Bush Extended Railbelt Southeastern Statewide DESIGNATION: ** Advocates Decision Makers Technical Experts * Geographic: Bush - Arctic Slope, Subarctic Coast, Aleutian Islands, Alaska Peninsula, Southwest Coast, Interior Extended Railbelt - South Central, Prince William Sound, Fairbanks/ Alaska Hwy Southeastern - Everything south of Yakutat ** Designations: Advocates - Those directly involved with special interest groups that have taken a social or political stand on energy, economic, evironmental, or resource de- velopment issues. Decision Makers - Members of the Alaska State Legislature, City Man- agers and Mayors, other city officials, Native leaders, and corporate administrators directly involved in strategic decision making processes concerning Alaska's future. Technical Experts - Economists, engineers, college professors, scien- tists, and others with education and expertise in the resource and environmental history of Alaska. 2-10 Figure 2.7 PROJECT TEAM MEMBERS A Ss SS NAME /AFFILTATION Dr. George A. Geistauts Associated Management Consultants/ Alaska Pacific University Dr. Theodore G. Eschenbach University of Alaska, Anchorage Gene P. Rutledge Pacific Polar Rims Dr. Raghbir S. Basi Alaska Pacific University Karen Shlak Yaworski Alaska Pacific University Stephanie A. Kesler Dr. Ann Fienup-Riordan Independent Consultant/ Author of The Nelson Island Eskimo PRIMARY AREAS OF RESPONSIBILITY Project Director and co-principal researcher; responsible for all aspects of the project design, implementation, and administration. Co-principal researcher; responsible for all aspects of project design with particular emphasis on statistical analysis and data base design. Responsible for energy aspects of research Primarily responsible for structured interviews in rural Alaska. Research/Administrative Assistant; principal author of chapter on rural Alaska. Responsible for writing and running computer programs. Conducted interviews in Toksook Bay. 2-11 é1-2 Figure 2.8 PROJECT SCHEDULE Event/Task Time Span: September October November December January February March April May June Contract Award 9/27 Problem Definition aa Delphi Working Group Mttg 10/25 Panel Design cae | ROUND #1 Design PEE) ROUND #1 released/returned ES ee ROUND #2 Design er ROUND #2 released/returned Ey ROUND #3 Design ay ROUND #3 released/returned EE Structured Village Interviews 2/28 3/14 4/27-28 5/2 Final Report Preparation a LTS ST Presentation of Report Draft to DCED : 5/18 Printing of Final Report eae Scheduled Release of Final Report —————— ar Rai Ieee eee was present in the data, and a judgment had to be made on how to interpret the data. In analyzing the data, great care was taken to protect the confidentiality of the responses of each panelist. While an individual response is sometimes reported, the identity of the panelist making the response is never revealed. Interpretation of the Results In normal survey research the general principles of statistics usually provide adequate guidelines for interpreting results. In the case of Delphi research, the situation is considerably more complex and application of statistical tests or decision rules may at times simply not work, or even lead to a wrong inter- pretation. The shape of the distribution is significant in Delphi; medians and modes may be more useful descriptors of prediction than means, and quartiles may be more useful than standard deviations as indicators of dispersion. Medians, quartiles, and mid-ranges are the descriptors used in this report unless otherwise specified. The median is the value which divides a distribution so that 50% of the responses lie on either side of it; a quartile is any one of the four sets of responses obtained by dividing the total response set (arranged in ascending or descending order) into four equal parts; the mid-range is the middle 50% of the responses, or middle two quartiles; the mode is the most com- monly specified value. These are illustrated in figure 2.9. Figure 2.9 ILLUSTRATION OF DESCRIPTORS Raw data: (years to an event, predicted by panel) 7,11,8,13,10,5,11,16,6,17,9,10,8,14,9,11 Data arranged in order of increasing values 5 6 Quartile 7 8 “e 9 } Quartile 9 Mode = 11 10% Median = 10 Mid-range 10 (middle 50%) 11 Quartile 11 tL 13 14 Quartile 16 17 2-13 Every reader will have to make a personal judgment about the validity and applicability of these results, but the following points should be kept in mind: @ Panelists were selected for expertise and balance; probability rules were not used in panel selection. The panel was neither a simple nor a stratified random sample. e Delphi is a group communication process in which panelists exchange views under controlled conditions. Individual panelist positions are, in effect, tested against those of other panelists through the feed- back and re-estimation process. Arguably, this should produce fore- casts that are "superior" in the sense that they have been "tested" against alternatives. e In Delphi, panelists predict the future, but do not "represent" the future. Increasing the panel size does not automatically improve the accuracy of the forecast, unlike conventional statistics where (all other things being equal) an increase in sample size results in greater accuracy. e If more viewpoints are represented on the panel, a forecast is tested against more alternatives and thus, if it survives, should gain cred- ibility. e@ The study focused on major resource, economic, and energy trends and events, for which the basic question is "Will the trend or event occur within a given time period?" The time horizon extends substantially beyond that of traditional econometric modeling, and the degree of precision associated with short-term studies cannot be expected. Re- sults of this study should not be compared with results of economet- ric modeling, but rather with the assumptions that form the under- lying conceptual basis of a given model. Note: Codes giving the round number, question numbers, and number of panelists responding are given after most figures. For example (R3-Q1, n=66) is a code identifying the data as having come from ROUND 3, Question 1, with 61 panelists responding. 2-14 CHAPTER 3 EXTERNAL INFLUENCES o OIL PRICES Oo OTHER EXTERNAL DEVELOPMENTS wy Chapter 3 EXTERNAL INFLUENCES Panelists were asked to predict developments external to Alaska for two reasons. First, even though the emphasis of the Delphi study is on Alaska and those events that the State can influence, Alaska's future is strongly affected by national and international developments as well. While panelists were selected for their Alaskan expertise, their expectations as to national and world events are useful predictions that can be of value in plotting Alaska's future. Second, their beliefs as to which external developments wil] occur clearly affect their pre- dictions of Alaskan events. This chapter highlights the expectations of panelists with respect to oil prices. In the first round 88% of the panelists stated that they expect oil to continue its dominant role both in the Alaskan economy and in the financing of State government. Unfortunately, oi] prices have been volatile and are completely outside the control of the State. However, these predictions of oil prices, even if not totally accurate, do provide a basis for modifying other panel pre- dictions as future oil prices are actually "revealed." Similarly, the panel's estimates of the probabilities of several federal government actions or policies and international trade developments provide greater insight into their other predictions. The following general observations summarize the panel's position: e Over half of the panel expects oil prices to rise substantially above the current level in the long run, with a third of the panel expecting a doubling in prices by the year 2000 (most of the panel finds this increase unlikely). e Over half of the panel expects oil prices to continue to drop in the short run. e@ The majority of panelists consider a major relaxation of U.S. envi- ronmental quality regulations in the U.S. to be unlikely. @ According to the panel, major U.S. emphasis on energy and mineral independence is more probable than improbable. In ROUND 1 panelists predicted the likelihood of significant oi] price increases and the probability that OPEC would cease to be a major influence on oil price stability. They also estimated the probability of occurrence for various nation- al and international developments. In ROUND 3 panelists described their specific expectations for oi] prices from now until the year 2000. The degree of panelist expertise on external developments was expected to vary considerably; therefore, ROUND 1 included a provision for self rating of exper- tise by panelists on each of the external development areas. Results are pre- sented for all panelists, and for those who stated that their expertise on the particular question area was high. 3-1 Oil Prices While in the short run half the panelists expect oi] prices to drop, in the long run half also expect prices to rise substantially above the present level, and 28% expect prices to ultimately be at about the present level. Only 8% predict prices will drop to a low level and stay there, and only 7% expect wild fluctua- tions. Figure 3.1 based on ROUND 3 responses (late March/early April, 1983) summarizes panel predictions. ROUND 1 predictions were made about three months earlier and are summarized in Figures 3.2 and 3.3. When asked about the probability of real (measured in 1983 dollars) world oi] prices doubling by the year 2000, about one third felt it would be less than 40%. High expertise panelists, as shown in Figure 3.2 tended to assign even lower probabilities to the oil price rising that high. The panel as a whole was split nearly evenly on whether OPEC would cease to be a major influence on oil] price stability, while more of the high expertise panelists felt that it would be improbable. Other External Developments Most panelists, and particularly the experts in the area, feel that a major relaxation of environmental regulations is improbable. Panelists are roughly split on the probability of Congress imposing substantial taxes on resource pro- ducing states. Over half of the panelists and the experts feel that major U.S. emphasis on energy dependence will be probable. About half of all panelists and 69% of experts feel an emphasis on mineral independence is likely. A slight plurality of all panelists felt a Pacific Rim "common market" was likely, but experts tended to consider it less likely. 3-2 FIGURE 3.1 OIL PRICES FROM 1983 to 2000 Percent Checking POSSIBLE TREND Each Alternative ee Will stabilize, then rise substantially above the present level Will continue to drop, but then will rise substantially above the present level Will continue to drop, but then will return to about the present level Will have stabilized at about the present level Will continue to drop to a low level and stay there Will fluctuate wildly Other (specified by panelists) Will drop, return to present level with slight fluctuations along the way Drop for a few years then climb at a rate slightly higher than inflation Stabilize, then rise slowly Continue to drop, rebound and fluctuate (R3-Q1, n=61) 3-3 Figure 3,2 PROBABILITY WORLD OIL PRICES DOUBLE BY 2000 EXPERTISE IS HIGH n=18 0 % CHECKING 0% " PROBABILITY REAL 1983 $'S (R1-0:88) 3-4 Figure 3.3 PANEL PREDICTIONS OF EXTERNAL DEVELOPMENTS National and International Likelihood of Developments Occurrence by 2000 Percentage of panelists selecting each probability category in the first round Major relaxation of environmental quality regulations in the U.S. Daria | No. OF PANELISTS Congress imposes substantial taxes on resource producing states. Major U.S. emphasis on energy independence. Major U.S. emphasis on mineral independence. Strong dollar prices U.S. exports out of many markets. Dramatic increase in "protection- ism" in world trade. Pacific Rim “common market" estab- lished. Real (measured in 1982 $) world oil prices increase by 100%. OPEC no longer a major influence on oil price stability. * "All" is total panel response, "Expert" is response of those panelists indicating high expertise in the question area. (R1-Q:B1-9, n=91) 3-5 0: 0-0..0.0. 0 CHAPTER 4 ISSUES AND STATE POLICIES GOVERNMENT AND PRIVATE SECTOR INFLUENCE ON DEVELOPMENT ECONOMIC HYPOTHESES MAJOR ALASKAN ISSUES LAND ISSUES DEVELOPMENT ISSUES AND PROBLEMS STATE POLICY Koy Chapter 4 ISSUES AND STATE POLICIES In developing a forecast for the next forty years, one of the most fundamental questions is "What issues will dominate the formation of State policy?" While only one factor in Alaska's economic future, State policy is the reason for do- ing this forecast. In fact, the panel's estimates of the relative influence of the State, federal government and private sector on the. course of Alaska's de- velopment (shown in Figure 4.1) indicate that the State has, and will have, the largest role in shaping Alaska's future. This chapter summarizes the panel's views on issues facing Alaska, presents the panel's views on which aoals the State should and will pursue, and reports the panel's predictions of which po- tential State actions will actually take place. The following general observa- tions summarize the panel's position on issues, policies, and State actions: e@ The panel believes that, in a broad sense, development will be the’ major issue facing State policy makers over the next twenty years. The panel's responses to the broad issues questions and the broad land questions in ROUND 2 stressed development. e@ While the panel believes that development is the key issue facing State policy makers, when asked about resolution of a number of spe- cific development issues, the panel, in most instances, assigned to the private sector the major responsibility for resolving the issue. e@ The panel expects the State to pursue a moderate course balancing growth and lifestyle/environmental preservation. In addition, the panel expects State policy to follow a moderate growth path through a sequence of large-scale projects. Only a quarter of the panel expects the State to pursue a high economic growth pattern with its possible risk to the lifestyle and environment, and only a sixth expects a low growth approach in State policy. e@ While there is a significant consensus on what State goals will and should be, the panel expects State qoals to emphasize the rate of growth, and the panel would prefer goals emphasizing stability. Panelists were asked in the first round to list issues they believed to be the most significant. Using these lists as a base, in ROUND 2 panelists rated the importance of each of the major issue areas. In the final round feedback on the panel's rating of the importance of issues was provided and questions were fo- cused on State policies and goals. 4-1 Government and Private Sector Influence on Development An important question facing planners and decision makers in Alaska is "What will be the relative degrees of influence that government and the private sector will exercise over Alaska's development?" This issue was pursued in ROUND 1 where panelists were asked to split 100 percentage points between state and fed- eral government policies and private sector initiatives so as to indicate their relative influence. The results, shown in Figure 4.1, indicate panelists believe that currently the State has the most influence - closely followed by the federal government. The panel predicted that over the next twenty years the State will retain its influence while the private sector will gain at the expense of the federal government. The panel's collective preference was for the private sec- tor to have the largest role - followed by the State, and then by a substantial- ly diminished federal influence. Figure 4.1 RELATIVE ROLES IN ALASKA'S DEVELOPMENT STATE STATE 37%, 37% , PRIVATE FEDERAL 28% 29% Y, FEDERAL” PRIVATE 35% 34% CURRENT SPLIT SPLIT DURING STATE NEXT 20 YEARS 30%, FEDERAL | l 18% “PRIVATE 52% HOW SHOULD IT BE SPLIT (R1-Q:C14, n=91) 4-2 Economic Hypotheses In order to gain additional insights into the panel's views on development influences and policies, in ROUND 1 the panel was asked to react to four sepa- rate hypotheses by estimating their probability of being true over the next twenty years, and if true, their desirability. The results are summarized in Figure 4.2 below: Figure 4.2 REACTIONS TO ECONOMIC AND POLICY HYPOTHESES % of Panelists Who Categorized Hypothesis DURING THE NEXT TWENTY IF TRUE, I FEEL THIS YEARS THIS WILL BE WILL BE I 5 HYPOTHESIS DEFINITELY FALSE VERY DESIRABLE DEFINITELY TR | PROBABLY FALSE DESIRABLE | UNDESIRABLE | VERY UNDESRIABLE jd Petroleum resources will remain the predominent driving force in the Alaskan economy. State government oi] revenues may decline, but other sources of revenue will make up the differ- ence. State supported construc- tion projects will be used to create employ- ment in Alaska. Alaska will use low energy rates as a method of attracting new in- dustry. (R1-Q:C9-12, n=91) 4-3 Issues Facing Alaska During the first round the panel identified 13 broad categories of issues impor- tant to Alaska, and in ROUND 2 panelists were asked to rate their future impor- tance in the years 1990 and 2000. Figure 4.3 shows the percentage of panelists that ranked each issue as among the three most important in those years. Accord- ing to the panel, these issues will continue to be of major importance in the future: oi] revenues, land/resource development, broadening the economic base, and the State's role in the economic development of the private sector. These issues were ranked by more than 50% of the panel as being among the most impor- tant in both 1990 and 2000. The relative importance of issues, as indicated by panelist rating, is not expected to change in any significant manner between 1990 and 2000. The impor- tance of oil revenues and the State's role were predicted to decline somewhat, while broadening the economic base, the future role of the Native corporations, and fish and game resources were issue areas expected to increase somewhat in importance. Panelists also ranked the importance of the land issues that they had previ- ously identified as significant. Only "transportation and access corridors" and “what the Natives will do with their land" were selected by a large number of the panel as having the most impact on Alaska's resource and economic de- velopment over the next twenty years. Figure 4.5 shows the panel's ranking and assignment of relative private and State responsibility for solution of 26 specific issues or problems associated with development. In nearly all cases, the panel consistently assigned the largest responsibility for issue/problem resolution to the private sector. The five development issues/problems receiving the highest current importance rating were economic diversification, resource exploration, protecting the environment, transportation to resource sites, and tourism development. However, the panel predicted that by the year 2000 increasing coal production and foreign market development will become more significant as issues/problems than resource exploration and tourism development. The issue/problem areas where the panel assigned more than half of the responsibility for resolution to the State were: Protecting the environment Transportation to resource sites Assuring cheap and abundant electric power Determining optimal land use 4-4 Figure 4.3 MAJOR ALASKAN ISSUES Issue Categories Considered by the Panel OIL REVENUES- instability, degree of State dependence, planning for declines. LAND/RESOURCE DEVELOPMENT- ownership, access, renewable vs. non-renewable, environmental concerns. BROADENING THE ECONOMIC BASE- renewable vs. non-renewable components, products, markets. STATE'S ROLE IN ECONOMIC DEVELOPMENT OF THE PRIVATE SECTOR - financing subsidies, providing infrastructure, tax policy stability. ROLE OF THE NATIVE CORPORATIONS - goals, control of resources, cor- poration ownership. DECISION MAKING PROCESS -short-term interests vs. long range orderly development ENERGY FOR ALASKANS -cost, availability traditional vs. alternative, develop- ment financing. SIZE OF STATE GOVERNMENT -growth rate of State Government, absolute size. LIFESTYLES -conflict with, dependence on development FISH AND GAME RESOURCES -adequacy of stocks, conflicts in use between subsistence, sport, and commercial INTER-GOVERNMENTAL CONFLICTS -Federal/ state, state/state, state/local, local/ local POPULATION GROWTH -encouraged/discouraged, impact, demand for services OUTSIDE VIEWS OF ALASKA -perceptions of Alaska's wealth, role, environmental values and attitudes. (R2-QA1-A14, N=77) 4-5 1990 2000 1990 2000 1990 2000 1990 2000 1990 2000 1990 2000 1990 2000 1990 2000 1990 2000 1990 2000 1990 2000 1990 2000 1990 2000 Percentage of Panelists Selecting the Issue as One of the 3 Most Important ee ee PTT ee oe Sf EI Sea eA ae C5 a i 41" (CGE ace, 2°. 2 scx, EE 33°. a 32° a 26% EE 2 2° a 25%. GE 2. 3% GEREEGRER 2 9°: Ma 21% a 1 9% MB 15% Mmm 12% @ %% I 1% Figure 4.4 LAND ISSUES ee. 0€—C0C0 mee Percentage of Panel Selecting Each LAND ISSUE As One of the Three Most Important 80% Transportation and access corridors 62% What the Natives will do with their land 33% Amount of land in private ownership 26% High federal ownership of land 22% Determining optimal land use 21% Multiple land use 18% Government leasing policies 16% State land disposal 13% Preserving natural land environment 12% Subsistence use of land 12% Zoning and local regulations 7% Land re-classification 7% Preserving the land for agriculture 4% Taxation of land 1% Overcrowded conditions A RS SS (R2-Q:B27, n=77) 4-6 Figure 4.5 DEVELOPMENT ISSUES AND PROBLEMS Importance Rankin THTgh=T Wedtum=Zy % Responsibility for (Low=3 None=4) Reseicing Issue Issue or Problem Current 2000 rivate ate Economic Diversification Resource Exploration Protecting the Environment. Transportation to Resource Sites 1.52 1.33 44% 56% Tourism Development 1.53 1.72 70% 30% Assuring Cheap and Abundant Electric Power 1.64 1.57 39% 61% Increasing Number of Jobs 1.68 1.84 73% 27% Developing Bottomfisheries 1.74 1.72 63% 37% Increasing Coal Production 1.77 1.47 77% 23% Attracting New Industries 1.76 1.70 55% 45% Foreign Market Development. 1.82 1.42 69% 31% Determining Optimal Land Use 1.85 1.85 39% 61% Encouraging Entrepreneurs 1.85 1.85 62% 38% Financing Housing 1.84 2.07 66% 34% Increasing Hard Rock Mining 1.90 1.52 77% 23% Bringing North Slope Gas to Market 1.89 1.81 79% 21% Increasing Timber Production 1.94 1.84 73% 27% Training of Workforce 1.95 1.94 © 61% 39% Communications Infrastructure Development 1.95 2.09 58% 42% Increasing Alaska's Independence 2.03 1.91 56% 44% and Sel f-sufficiency Providing Business Financing 2.02 2.13 74% 26% Converting to Renewable Resource Economy 2.15 2.00 60% 40% Developing Alternative Energy Sources 2.22 1.98 54% 46% Attracting Foreign Capital 2.48 2.20 68% 32% Developing Agriculture 2.50 2.13 62% 38% Providing Business Management Assistance (Importance Ranking-median, % Responsibility-mean) (R2 - Q:B1-B26, n = 77) State Policy In ROUND 3, panelists considered alternative State policies, budgetary emphasis, and goals. Figures 4.6, 4.7, and 4.8 indicate the percentage of panelists who selected each alternative as the most likely and/or most desirable. The majority of the panelists have moderate expectations, although they may have strong preferences. None of the panelists, for example, expected environment and 1ife- style preservation to be emphasized over economic growth. Building on these basic assumptions, panelists predicted that the major thrust of the state budget (beyond the operating budget and those capital expenditures required to maintain minimal public facilities) would be local public works and statewide infrastructure for resource development. This expectation includes the use of the income from the Permanent Fund. As Figure 4.7 indicates, about 80% of the panel has this expectation. Finally, when evaluating and predicting the goals of the State government over the next two decades, there is some contrast between the panel's expectations of “what will be" and their beliefs as to "what should be." As can be seen in Fig- ure 4.8, three of the four goals expected by 40% or more of the panel are ori- ented around rapid development: 65% - increasing economic growth, 49% - pro- viding jobs in general, and 40% - maximizing resource development. On the other hand, the three top goals the panel felt should be pursued are oriented toward stability: 77% - diversifying the economic base, 46% - insuring planned and paced growth, and 36% - stabilizing the "boom/bust" cycle. 4-8 Figure 4.6 STATE ECONOMIC GROWTH POLICY a ETE ETI EIDE aE Percentage of Panelists Selecting Each Category for the Next Twenty Years ET 0% 69% 23% 8% 8% 67% 21% 4% STATE POLICY WILL EMPHASIZE Preservation of Alaskan lifestyles and environment over economic growth A balance between growth and lifestyle/environmental preservation Economic growth even at significant risk to lifestyle and environment Other (please specify): 3%-adjusting interracial and bush-urban conflicts, 1.5%-growth w/o risk to lifestyle and environment, 1.5%- erratic fluctuations reacting to oil prices, 1.5%-not specified. STATE POLICY TOWARDS ECONOMIC GROWTH Will not follow a high growth path, but rather choose to build State and industry assets slowly Will follow a moderate growth path through a sequence of large-scale industrial and infrastructure projects Will seek maximum growth through a very strong resource development and export policy Other (please specify): 3.9%-industry and markets will dictate, 1.5%-will seek strong growth through resource development while trying to appease lifestyle demands. ee (R3-Q:1 & 2, n=66) 4-9 Figure 4.7 STATE BUDGET AND PERMANENT FUND Percentage of Panelists Selecting Each Category for the Next Twenty Years During the next twenty years, the MAJOR THRUST in Alaska state budget spending (beyond the operating budget and those capital expenditures required to maintain minimal public facilities) will be: 45% Local public works project support 39% Resource development infrastructure support 7% To build up the Permanent Fund 3% Loan programs to reduce interest rates 6% Other (please specify): 4.5%-nothing, no $, 1.5%-broad spectrum of pork barrel. During the next twenty years, Permanent Fund income generally will be: (more than one could be checked) 48% Put into development and infrastructure projects 44% Put into the general state budget 15% Re-invested in the Fund 13% Distributed to individual Alaskans 2% Other (please specify): 1.5%-foundation to support social services nS PSS SF RES, TS a SSSR SETS (R3-Q:4 & 5, n=66) 4-10 Figure 4.8 STATE GOALS ext Ae Percentage of Panelists Selecting Each Goal For the Next Twenty Years eee cre SERRE SE ER A A a Goals Goals Should Be Will Be 21% 65% Increasing economic growth 18% 49% Providing jobs in general 717% 45% Diversifying the economic base 28% 40% Maximizing resource development 26% 25% Protecting the environment 10% 24% Raising the standard of living in Bush Alaska 36% 14% Stabilizing the "boom/bust" cycle 17% 13% Preserving Alaska's traditional values and lifestyles 7% 12% Providing jobs only for current residents 46% 9% Insuring planned and paced growth 10% 5% Other (please specify): Capital works, fiscal responsibility of government, maximizing disposal of land to private sector, working with corporations to gain economic growth. (R3-Q8, n=66) 4-11 0° 0-0,.610. 03070 70 0 00 CHAPTER 5 ALASKA'S FUTURE ECONOMY EXTERNAL DEVELOPMENTS IMPACTING THE ECONOMY TOTAL SIZE OF ALASKA’S ECONOMY FACTORS IN ECONOMIC GROWTH STATE GOVERNMENT ECONOMIC POLICY AND ACTIONS STATE SUPPORT FOR INDUSTRIES ECONOMIC FORECASTS BY SECTOR RELATIVE INDUSTRY SIZE POTENTIAL RESOURCE MARKETS NORTH SLOPE GAS USE NEW INDUSTRIES ALASKA BUSINESS CLIMATE TECHNOLOGICAL CHANGE AND IMPACT KY Chapter 5 ALASKA’S FUTURE ECONOMY The future size and structure of Alaska's economy is of undisputed importance to virtually every Alaskan. The availability of jobs, the growth of population, re- gional development, the demand for energy, and the size and policies of state government are all dependent on the state economy, which in turn is shaped by these factors. In particular, State policies, although they may not be able to compel economic growth, can certainly be structured to encourage or retard growth. This section of the report summarizes predictions that were primarily economic in character. However, in a broader sense, virtually the entire Delphi process focused on Alaska's economic future. Thus, the results summarized in this chap- ter must be considered in conjuction with those reported in the other chapters in order to obtain a complete picture of the future economy. Among the pre- dictions are: e@ The Alaska economy (in constant 1979 dollars) will reach $20 billion by the year 2000; this implies an average compound annual growth rate of 2.9%. e The most likely disposition of North Slope gas is a pipeline to tide- water, with a 50% probability the gas will be exported. The gas is likely to reach the market between 1992 and 1995. A Canadian pipeline or re-injection are, roughly, equally likely secondary alternatives. e Mineral and energy resources, Pacific Rim access, and renewable resources will be major factors encouraging growth; high development or production costs, lack of infrastructure, and low resource prices will be the major factors discouraging growth. e Raw material availability, Pacific Rim relationships, energy availa- bility, State loan programs, and the quality of life are among the most positive aspects of the Alaska business climate; environmental regula- tions, Alaska market size and characteristics, labor unions, and permit process requirements are among the most negative. e Coal, hard rock mining, fisheries and tourism are predicted to exhibit strong growth; timber is predicted to grow only moderately, and slow growth is predicted for agriculture. e@ The Pacific Rim - U.S., Japan, Korea, and other Asian countries - will be the main market for most of Alaska's natural resources; Europe is unlikely to become a strong market. 5-1 e Expanding transportation infrastructure, providing inexpensive power, increasing financial incentives, and coordination/planning are among the most important, and most likely, State actions to encourage develop- ment. e@ The most likely industries to receive strong State support are fisher- jes, oil and gas, tourism, and coal development. e Communication technology and computers that make working or living any- where (or at long distances from other economic activities) more fea- sible, could alter work and life patterns in Alaska. Panelists were asked to make economic predictions and to evaluate economic policies in all three rounds. In ROUND 1 panelists focused on external develop- ments affecting Alaska, the size of the Alaskan economy, factors encouraging and discouraging economic growth, increases or decreases for a number of economic sectors, factors affecting the disposition of North Slope gas, and evaluation of the Alaska "business climate." In ROUND 2 panelists evaluated a number of economic issues, and indicated what actions the State could take to encourage economic development. Results of the first round predictions were fed back to the panel, and panelists predicted future sector levels once again and re-examined the options for use of North Slope gas. In ROUND 3, by selecting alternatives, panelists constructed a scenario for Alaska's future. Panelists considered the probable trend in oil prices, state economic policy, probable markets for Alaska's resources, the relative growth of industries, the possible emergence of industries new to Alaska, and the relative timing of key economic events. External Developments Impacting Economy Chapter 3 reported panelist's predictions of national and international develop- ments during the period from now to the year 2000 that could impact Alaska's economy; because these predicted developments form a context within which the Alaskan economy will have to operate, they are also briefly summarized here: e Half of the panel expects oi] prices to rise substantially above current levels; however, the panel does not expect prices (in real 1983 dollars) to double by the year 2000. @ The panel does not expect a significant relaxation in U.S. environmental quality regulations. e@ Roughly equal numbers of panelists assigned high and low probabilities to Congress imposing substantial taxes on resource producing states. @ About half the panelists assigned high probabilities for a major U.S. emphasis on energy and mineral independence. 5-2 Total Size of Alaska's Economy Panelists were asked in the first round to estimate the total size of Alaska's economy (in billions of 1979 constant dollars); the results are shown in Figure 5.1. According to the panel, the economy will grow to $19.7 billion by the year 2000 - this implies an average growth rate of 2.9% per year. Figure 5.1 TOTAL SIZE OF THE ALASKAN ECONOMY Predicted: (lower quartile-median-upper quartile) 1990 2000 2020 12.0-14.3-16.0 14.0-19.7-25.0 20.0-25.0-36.0 (R1-Q:C4,n=91) Factors in Economic Growth In ROUND 1 panelists were asked to list up to three major factors encouraging economic growth, and up to three factors discouraging such growth for the period from 1980 to 2020. Although the two lists of factors are not completely ident- ical, many panelists did comment on the similarity of the economic factors, shown in Figure 5.2, to the factors influencing population growth (see Figure 6.1 in the next chapter). Figure 5.2 MAJOR FACTORS IN ECONOMIC GROWTH Factors ENCOURAGING Economic Growth* Factors DISCOURAGING Economic Growth Alaska mineral resources High development and production cost Alaska energy resources Lack of infrastructure Pacific Rim access Resource prices Alaska's renewable resources General economic conditions Tourism State government regulations: amount Electricity & energy for energy and stability intensive industries Remoteness of Alaska Resource prices General economic conditions - Alaska vs. U.S. & the world Government encouraging growth Oil revenues * Listed in order of frequency mentioned by panelists. (R1-Q:C4,n=91) 5-3 State Government Economic Policy and Actions A number of different aspects of State policy and actions with a potential impact on Alaska's economy were reported in detail in Chapter 4. The panel concluded that protecting the environment, assuring transportation to resource sites, assuring cheap and abundant electric power, and determining optimal land use were issue/problem areas where the State responsibility exceeded that of the private sector. The panel expected the State to pursue a moderate course balanc- ing growth and lifestyle/environmental preservation and to follow a moderate growth path through a sequence of large scale projects. Resource development infrastructure projects were predicted to receive a major emphasis in discre- tionary State spending, and to be the main recipients of Permanent Fund income. Panelists predicted that increasing economic growth, providing jobs, and diver- sifying the economic base will be the primary State economic goals. In ROUND 2, panelists identified potential actions State government could take to encourage economic development and in ROUND 3 they evaluated the resulting list. The results, shown in figure 5.3, show that expanding the transportation infrastructure is both the most important single action and the most likely to be taken. While "providing stable and inexpensive power" was the second most- frequently checked action in the importance category, making land available, increasing investment and financial incentives, and coordinating/planning all were more frequently chosen as "likely to be taken." One State action - "reducing subsidies of selected industries" - was listed in ROUND 1 by panelists who believe that a policy of selective subsidies is actually counterproductive to general economic growth. Figure 5.3 STATE GOVERNMENT ACTIONS ENCOURAGING DEVELOPMENT % of Panelists Considering the Action as: Likely to Important be Taken 76% 68% Expanding the transportation infrastructure 47% 46% Providing stable and inexpensive power 39% 52% Increasing investment and financial incentives 36% 54% Coordinating and planning for economic development 35% 23% Reducing regulatory restrictions 30% 20% Stabilizing or reducing resource taxes 23% 58% Making land available for private development 9% 20% Reducing subsidies of selected industries (R3-Q7, n=66) 5-4 State Support for Industries Panelists were asked to indicate which three industries or resource areas would receive the strongest State emphasis, support, or assistance; the results are shown in Figure 5.4. A large majority of the panel indicated fisheries, and about half of the panel indicated gas, tourism, and coal. Figure 5.4 STATE SUPPORT FOR INDUSTRIES/RESOURCE AREAS % Selecting Area as Likely to Receive State Support Industry /Resource Fisheries Oil & Gas Tourism Coal Construction Hard rock minerals Agriculture Timber Petrochemicals Manufacturing Economic Forecasts by Sector In ROUND 1 panelists were asked to estimate, as a percentage of the 1980 ref- erence value of 100, future levels for several major sectors of Alaska's economy. The mid-range (middle 50%) first round responses were fed back to panelists on the second round, and they were asked to estimate sector levels once again. The results are shown in Figure 5.5. Coal, hard rock mining, and tourism are pre- dicted to double in size during the next two decades, while only modest growth is expected in timber, fisheries and agriculture. Oi] and gas is expected to grow at a moderate rate through the next two decades and then essentially stab- ilize. No significant growth is forecasted for the Federal government (includ- ing military) component of Alaska's economy. 5-5 Figure 5.5 ECONOMIC SECTOR FORECASTS Future levels relative to 1980=100% SECTOR Oil & Gas 110-125 125-155 120-170 125 150 150 125-155 155-220 225-300 150 200 250 220-350 300 Hard Rock Mining 123-150 130 175-210 200 120-150 125 100-110 105 110-130 120 130-200 150 122-152 133 107-125 112 Fisheries 135-170 150 120-140 130 105-120 110 Agriculture 200-300 250 175-210 200 130-155 150 Tourism 100-120 112 100-111 110 Federal Govt (incl. Military) 100-110 103 (R2-0:C1, n=77) 5-6 mid-range median Relative Industry Size The panel stated that the oi] and gas industry will continue to be the dominant force in the Alaskan economy for some years to come. However, the goal of economic diversification requires that other industries experience substantial growth. Therefore, in ROUND 3 panelists were asked to predict the relative size of several industries, using tourism as a reference value of "100" for the years 2000 and 2020. The medians and mid-ranges of panel predictions are given in Figure 5.6, and Figure 5.7 depicts the relative size graphically. As can be seen from these figures, coal and hard rock mining are expected, ultimately, to surpass tourism in size, fisheries will equal tourism, and timber and agriculture will be significantly smaller than tourism. Figure 5.6 RELATIVE SECTOR SIZE 100 100 90 75 100 50 100 | 40-150 | 50-115 50-100 | 80-130 10-75 100 118 110 81 103 50 100 }100-175 | 60-150 35-100 | 75-150 20-80 (R3-Q10, n=66) Median Yr Mid-range Median Yr 2020 Mid-range Yr 2020 Figure 5.7 RELATIVE GROWTH YEAR 2000 YEAR 2020 CCT ||| ||| eee PERCENT RELATIVE TO TOURISM 140 120 RSS S255 beoeSeG 100 eS Seo eee ame | men eee a ate IMR it cate ate seta mans Pose 4 Reed 80 RSSe 1 xx BSS d PRK BS e554 RSeSeod PSeSe%e} SeSeSe} Boseses RSS Od “ereren PSe526e} [Soo 9 Besos 60 PeSeSeS S55 “eteten BS RSS Rese) BSS Rood RSeSe% bes RSS RSe6o5d) XR Bees Reed RSoSo%c] ogetes Deseseg a” bees RSeSd RSeSe% SeS<Se) Deseseg BS RSeSd eteten SeSe52] KeSeS09 Bese RSS eteten SoSe80) Doses PSo5<%<} Sess 9 Beseses S256 O55 Poses S08 “eran 25250] Kees 20 BSS R054 RSeSe5d) PSeS2Se) Doses xXx DOOD DOOD OOO OOO4 PSoS2e} Seseseg Peseseg Sooo Roose PSeS25e} Sess 9 Beseeeg RSeoo RSS 0 PSeS252) Bee BeSeSeg RS KS COAL MININ! TIMBER FISHERIES AGRIC. INDUSTRY (R3-Q10, n=66) 5-7 Potential Resource Markets Actual “export" of resources to markets outside Alaska requires both a receptive market and a willingness and ability of the supplier to meet market conditions. In ROUND 3 panelists ranked markets in terms of first, second, and third in importance for a particular resource or indicated that they felt there would be no market by checking "none." The data shows that panelists expect the U.S. to be the primary market for Alaska's oil, gas, and other minerals. They also expect Japan and Korea to be the primary markets for coal, lumber, pulp, seafood, and petrochemicals. Japan and Korea will be the secondary markets for oil, gas, and other minerals; other Asian countries will be secondary markets for coal, lumber, and pulp. The U.S. will be the secondary market for petrochemicals and seafood. The results are shown in Figure 5.8. In each cell, reading down, the % of panelists selecting the market as first, second, and third is given, followed by the total % (TS) of panelists selecting the market, and then by the median rank assigned by all panelists who selected that market. For example, as shown below, data for the "Gas/Japan & Korea" cell can be interpreted as indicated: Japan & Korea Ist 44% % who predicted J & K would be main market 2nd 41% % who predicted J & K would be 2nd market Gas | 3rd 3% % who predicted J & K would be 3rd market As 88% % who predicted J & K as one of 3 main markets MR 1.50 median rank of J & K as a gas market (1 - highest, 3 - lowest) The "none" column shows only the % of the panel which felt that no market at all would exist for the specified resource; the number of panelists who identified a primary market, but no secondary market, is not reported in the table. 5-8 Figure 5.8 POTENTIAL RESOURCE MARKETS JAPAN & KOREA EUROPE chemicals Minerals fo North Slope Gas use In ROUND 1 panelists ranked, by likelihood, options for use of North Slope gas. Based on those results, a revised list of options was included in ROUND 2 and panelists ranked these uses again, predicted the probability of export, and pre- dicted the most likely year for the gas to first reach market. The results are summarized in Figures 5.9 and 5.10. The panel predicted that a pipeline to tide- water in Southcentral Alaska is the most likely use. Depending on the measure used, either a pipeline through Canada or re-injection is the second most-likely alternative. Figure 5.9 PROBABLE USE OF NORTH SLOPE GAS % Who Ranked Option as ee Most Second Third Fourth Likely Most Most Most OPTION Likel Likely Likel Ty Pipeline to Tidewater Pipeline through Canada Leave in place (re-injection) Pipeline to Fairbanks Liquified (or methanol) through oil pipeline (TAPS) Other: Tankers from North Slope Rail transport Probability of export to foreign markets: median - 50%; mid-range: 20-60% Year for reaching market: median - 1993; mid-range (middle 50%): 1992-1995 (R2-QC3, n=76) 5-10 Figure 5.10 NORTH SLOPE GAS: TRANSPORTATION OR USE RANK SCORE MOST LIKELY REE Yl OF PANEL SELECTING AS MOST LIKELY % RANK SCORE (1.0 Highest) P3555 PIII OOOO Recececerececocecesacecererererecetetetes PS SOS SIH 05 0559 OOOO OOO DOO DIA IRR \<* PDD DP PP PPA PSO 5 52505555050 RRS R KINI R525 55 050505 SAR RES SSSR SSS 5555255 0505.05 $825 2525052 555262525 BG poor RRR loc = JECT ALTERNATIVE USES BS BOF APT PS TTA RRR R552 S525 SORSY (R2-Q:C3, n=76) 5-11 New Industries Panelists were asked in Round 3 if there is a possibility that a new, but largely unanticipated industry will emerge in Alaska by the year 2020. A synopsis of answers is in Figure 5.11. ae RR A SR Figure 5.11 POSSIBLE NEW INDUSTRIES — EE eee eee High tech or information services Heavy electrical use manufacturing at tidewater - e.g. aluminum Peat and peat derivatives Nuclear energy Water to West Coast Services marketed outside Alaska Hydrogen Greatly increased military use of AK Geothermal energy International banking Food processing Ocean mining for minerals Proprietary products through research Gambling Technology for rural areas Petrochemicals (R3-Q:11, n=66) Alaska Business Climate The factors in Figure 5.12 describe the "Alaska Business Climate." Panelists indicated in ROUND 1 whether, during the next twenty years, each factor will be generally POSITIVE (encouraging business ventures and growth in Alaska) or NEGATIVE (discouraging business ventures and growth in Alaska). Factors are listed in order from most positive to most negative ranking. 5-12 Figure 5.12 ALASKA BUSINESS CLIMATE NEGATIVE POSITIVE Composite Score BUSINESS FACTOR (medians) Raw material availability Pacific Rim relationships Energy availability State loan programs . ~s Ww |w > N [oO Quality of life Communications infrastructure Foreign investment in Alaska Quality of the environment Land availability State policy toward development} 2 6 Labor availability 4 6 30 26 27 8 Local capital availability w a Management skill level in Ak Transportation infrastructure Ww |w ee 1H Tax rates and policy w . Oo Zoning regulations Federal policy or reg Environmental regulations nm nm nO ny ny nm . nm a a @ oe wo Alaska market characteristics Labor unions Permit process requirements Alaska market size 5-13 (R1-0:C8, n=91) Technological Change and Impact In ROUND 3 panelists were asked what technological developments they expect to significantly impact Alaska during the next twenty to forty years, with partic- ular attention to transportation, communication, energy production, energy use, mineral appeared production, fishing, and timber processing. Several common themes frequently in the panelist's responses and are sumamrized below: Transportation developments, such as improved icebreakers, roll-on/roll- off barges, and lighter-than-air or undersea transport could make resource development more economical or ease rural supply problems. Wind, solar, compact nuclear, and other energy system breakthroughs could ease rural energy problems. Major energy production breakthroughs (fusion, for example) or use patterns (electric cars, nuclear in Japan) could reduce demand for Alaska's resources. Tidal power, in-state coal use, or geothermal breakthroughs have major potential for altering Alaska's energy picture. Aquaculture, automation of fish processing, new ways of at-sea process- ing, and faster air transport could alter economics of fishing industry. Computers and telecommunications technology will reduce the signif- icance of distances so that working at home will be feasible and so that the combination of rural lifestyle and a "cash" job may be more generally possible. Energy and mineral exploration, mining or recovery, and transportation breakthroughs will alter Alaska resource economics. Some listed developments are ocean mining, chemical mining, tertiary oil recovery techniques, and slurry pipelines. Alaska may have a potential as a platform for exploration, use, or research in space. (R3-Q:12, n=66) 5-14 00:0 0° 0 CHAPTER 6 POPULATION FACTORS AFFECTING POPULATION GROWTH POPULATION GROWTH RATES POPULATION LEVELS REGIONAL DISTRIBUTION ANCHORAGE POPULATION PROJECTIONS uot Chapter 6 POPULATION The population level of Alaska is both a key result of and a driving force be- hind the economic trends described in the previous chapter. In fact, when asked to separately describe the factors influencing population and economic growth, many panelists responded "see previous list." For example, many projects appear to be necessitated by expected population growth, but construction projects themselves promote population growth. Population and the state economy are linked in an endless feedback loop. Detailed panel predictions of population are presented through the graphs and tables which follow; among the major results are the following: @ The panel expects the population level of Alaska to increase at a growth rate about three times that projected by the Census Bureau for the rest of the United States over the next forty years, but these rates will be below those Alaska has grown at over the last thirty years. @ The median panel predictions of most likely average yearly Alaska pop- ulation growth rates are 2.50% per year from 1980 to 1990, 2.09% per year from 1990 to 2000, and 1.50% per year from 2000 to 2020. These rates imply most likely population levels of 515,000 in 1990, 633,000 in 2000, and 852,000 in 2020. @ Although all regions of the state will be growing in population, the Railbelt, and Anchorage in particular, will be growing at the most rapid rate; this will cause a small shift in the relative regional population distribution percentages. e@ The panel predicts Anchorage's population will most likely reach 225,000 in 1990, 300,000 in 2000, and 350,000 in 2020. Population questions were included in all three rounds of the Delphi process. In ROUND 1 panelists listed the major factors determining the rate of population grovith and estimated high, most-likely, and low levels of population for the years 1990, 2000, and 2020. They also estimated the distribution of population among the Bush, Southeast, and the Extended Railbelt regions of the state, and for Anchorage alone. For ROUND 2, panelists were provided with feedback as to their individual responses and the upper and lower quartile "limits" of the pan- el's responses, before re-estimating population levels for the state as a whole. The panelists also ranked the factors influencing population growth that they had originally listed in the first round. In ROUND 3 panelists were provided with feedback on all population questions before estimating the growth rate of Alaska's population through the year 2020. 6-1 Factors Affecting Population Growth Over 50% of the panel indicated Alaska's economy (resources, wages, high stan- dard of living, capital projects, economic growth) and the basic “appeal of Alaska" (quality of life, uncrowded conditions) were important in encouraging population growth. Among factors discouraging population growth, climate and remoteness were considered to be important by 68% of the panelists; the other factors also considered important in discouraging growth were economic in character (high costs of production or development, high cost of living, low resource prices, etc.). . Figure 6.1 MAJOR FACTORS IN POPULATION GROWTH (% of panelists ranking each factor as one of the most important) Factors ENCOURAGING Population Growth Factors DISCOURAGING Population Growth Alaska's mineral, energy, and Climate and remoteness other resources 63% High costs of production and/or development 58% Good wages, high standard of living High cost of living 55% Capital projects, such as the gas pipeline Low resource prices, markets, reduced revenues 54% Appeal of Alaska, quality of life, uncrowded conditions Lack of infrastructure Alaskan economic growth 37% Government regulations, re- strictions, response times Unemployment Outside Improved economy in the rest of the U.S. Loans, dividends, low taxes 23% Shortage of land available for private or industrial use State financing/subsidizing services (R1-Q:C2,n=91) 6-2 Figure 6.2 PANEL FORECASTS OF POPULATION GROWTH RATES AVERAGE ANNUAL PERCENTAGE GROWTH RATES: Decade 1950-60 1960-70 1970-80 1980-90 1990-2000 2000-2020 %/year %/year %/year %/year %/year %/year (UQ = upper quartile, M = median, LQ = lower quartile) ** Rates for U.S. from Census Bureau forecasts. Figure 6,3 ALASKA & U.S. POPULATION GROWTH RATES ALASKA US Gaia ANNUAL % RATE TIME PERIOD (R3-Q15, n=75) 6-3 Figure 6.4 PANEL FORECASTS OF POPULATION LEVELS NUMBERS COMPUTED FROM FORECASTED RATES (in 1000's) 1960 1970 | 1980 1990 | 2000 a 0 0 ee MEDIAN 226 302 402 515 633 852 LOW QUARTILE 505 615 789 Figure 6,5 POPULATION LEVELS POPULAT ION IN 1000'S 1,100 - 25% OF PANELISTS HAD AN ' ESTIMATE ABOVE THIS LINE HIGH QUARTILE 1,000 - 900 7 MEDIAN 800 6 LOW QUARTILE 700 7 600 - ACTUAL POPULATION 25% OF PANELISTS HAD AN To 1982 ESTIMATE BELOW THIS LINE 500 - 400 7 300 - 200 - 1960 1970 1980 1990 2000 2010 2020 YEAR Figure 6.6 POPULATION DISTRIBUTION BY REGION o EXTENDED RAILBELT AREA -South Central -Prince William Sound -Fairbanks/Ak Hwy R o THE "BUSH" AREA -Arctic Slope -Subarctic Coast -Aleutian Islands % -Alaska Peninsula -Southwest Coast -Interior ee F" SOUTHEASTERN o SOUTHEAST AREA ERB, : = 1% must 73% BUSH 16% 15% “SOUTHEAST * SOUTHEAST 13% 12% CURRENT 1990 oat BUSH 14% * SOUTHEAST 11% 2000 & 2020 (R1-Q:C2, n=91) 6-5 Figure 6.7 ANCHORAGE POPULATION PROJECTIONS POPULATION (1000's) 600 500 400 300 Upper quartile Ny 258 Median Lower quartile~ 200 174 100 1980 1990 YEAR (R1-Q:C3, n=91) 6-6 ©. O..0; .0:. 9 CHAPTER 7 MAJOR EVENTS INTERPRETATION OF RESULTS MAJOR FIRST WAVE EVENTS EVENT DESIRABILITY CROSS-IMPACT ANALYSIS SECOND WAVE PROJECTS Koy Chapter 7 MAJOR EVENTS Alaska's history and projected future are often characterized in terms of major "events" that alter - often permanently - the course of Alaska's development. A major resource discovery, the completion of a large capital project, or a piece of landmark legislation are general examples of the kind of events that alter or dramatically accelerate established development trends. In comparison to other states, Alaska's economy and population are still small enough that the effects of major events are magnified in importance; for that reason, events were stressed in the Delphi questionnaires. Fortunately, the prediction of major discontinuities in established trends is an area where the Delphi methodology typically excels. Although other chapters include some discussion of selected events, this chapter focuses specifically on the detailed results of the "event" questions. Among the predictions by a majority of the panel: @ Permanent shutdown of the Trans-Alaska Oi] Pipeline will not occur before the year 2030. e@ North Slope oi] is likely to be shipped to Japan by the late 1980's. e@ Commercial production of Beluga coal will occur in the early 1990's. @ The first Susitna dam is likely to go on line between the years 1995 and 2000. The second dam will follow 8 to 13 years later. e Bottomfishing will be established as a major industry by the early 1990's. e Alaska is never likely to become a major exporter of agricultural products. e@ At least one new, large-scale mine will be operating in the Brooks Range by the mid-1990's. e@ The Alaska Railroad has a 50-50 chance of being linked with the rest of the United States. @ The Knik Arm Crossing will be completed by the late 1990's. e@ The State personal income tax is likely to be re-imposed as early as 1987 and before 1992. @ The Capital is unlikely to move from Juneau. Event questions were included in all three rounds of the Delphi process. In ROUND 1 panelists predicted the years to occurrence for 28 events; in making their predictions panelists indicated the soonest (10% probability of occur- rence by then), the most-likely (50% probability of occurrence by then), and the latest (90% probability of occurrence by then) timing for each event. Panel- ists could also indicate that, in their opinion, an event would never reach a given probability level by entering "Never" as a response. In ROUND 1 panelists also were asked to provide desirability and personal expertise ratings for each event (see Chapter 2 for scales used). The years of occurrence and the desirability for fifteen of these events were re-examined during the second round with feedback of first round predictions provided. For the third round, the most-likely year of occurrence for nineteen events was re-examined in a format which emphasized the sequencing and timing of events. Feedback for ROUND 3 was in the form of Delphi pentagons for each of thirteen ROUND 2 predictions plotted on a common time scale. The events investigated through the process described above typically were either major projects or potential turning points in key socioeconomic trends. These projects, if actually undertaken, are likely to be completed within the next twenty to thirty years and could be considered the "first wave" of projects. In ROUND 3, panelists were also asked to predict the projects that were likely to follow; i.e., to constitute the "second wave" of projects with completion times falling between the years 2000 and 2050. Interpretation of Results In interpreting the results of the event questions, the following guidelines should be kept in mind: 1. Panelists were asked to predict completion points rather than starting points for projects; the completion point is that instant in time when the project construction is essentially finished and the project starts producing goods or service; - e.g. when a dam is ready to generate power. Completion times were chosen because of the difficulty of unambiguously defining starting points. In interpreting the economic impact of construction project events, it should be noted that the construction impact (construction labor) will precede the predicted date, and the operating impact (operating jobs, availability of serv- ices or resources) will follow the date. 2. Panelists have a bias for 5's and 10's; thus 5, 10, 15, 20,...and 1990, 1995, 2000...occur far more frequently in the predictions than they will occur as events actually take place. 3. The format of most event questions allowed panelists to decide if an event would reach a given probability level (10%, 50%, 90%), and assum- ing that the panelist had decided that a specific probability will be reached, to predict when the level will be reached. A panelist who believed a specific event-probability level will be reached indicated 7-2 that by entering the year (or years from now to then); a panelist who felt that a specific event-probability level would not be reached entered "Never." 4. High panel agreement on a specific event-probability combination is indicated whenever: a) few panelists entered "Never" and the mid-range of predicted years is narrow, or b) the overwelming majority of panelists entered "Never." 5. Polarization is indicated when the percentage of "Never" responses is close to 50% of total responses (panelists split on whether event will take place), and/or the predicted mid-range is very broad (panelists unsure when event will take place). 6. Quartile and median years should be interpreted with extra care when a large fraction of the panel does not expect the event to happen, as only 10-20 panelists may expect it to occur. 7. Discussions and graphical representation of event occurrence times in this report generally utilize the "most-likely" (50% probability) times; the "latest" (90% probability) may be preferable for some purposes. Data for 90% probabilities are in Figure 7.2. 8. The occurrence of some events may affect the probability or timing of other events. A brief cross-impact analysis is developed in a later section of this chapter. Major First Wave Events Figures 7.1, 7.2, and 7.3 summarize major first wave event results from the three rounds. Where the event was investigated in more than one round the most recent round results are given. Figure 7.1 shows predicted most-likely (50% probabil- ity) event occurrences based on ROUND 3 results on a common calendar scale. Figure 7.2 summarizes detailed event predictions from all rounds in tabular form; the example on page 7-6 indicates the scope of the data and how it is arranged. Figure 7.3 gives the percentages of the panel choosing each desirability level and the median desirability rating computed from the total panel response. Figure 7.1 MOST LIKELY EVENT TIME PREDICTIONS The length of the shaded bar in each case shows the mid-range (middle fifty per- cent) time estimates given by those panelists who believed the probability of the event would reach 50%; the peak shows the median. Also given is the percent- age of panelists who felt the 50% probability point would not be reached and entered a "NEVER" response. EVENT MOST LIKELY YEAR OF EVENT'S OCCURRENCE (COMPLETION) 1985 1990 1995 2000 2005 2010 ALASKA RECEIVES AN EXEMPT- ae ION FROM THE JONES ACT 50% NORTH SLOPE OIL IS SHIPPED ee TO JAPAN | 15% NORTH SLOPE GAS REACHES MARKET WORLD SCALE PETROCHEMICAL PLANT IN ALASKA tele 46% NA COMPLETION OF THE PACIFIC ALASKA LNG PLANT ON THE KENAI PENINSULA 22% COMMERCIAL PRODUCTION OF BELUGA COAL —b- 2% FIRST SUSITNA DAM ON LINE ol 27% SECOND SUSITNA DAM ON LINE 19% BOTTOMF ISHING ESTABLISHED AS A MAJOR INDUSTRY 14% 7-4 Figure 7.1 (continued) EVENT MOST LIKELY YEAR OF EVENT'S OCCURRENCE (COMPLETION) 1985 1990 1995 2000 2005 2010 QUARTZ HILL MINE PRODUCT ING COMMER - CIAL QUANTITIES OF Bes MOLYBDENUM _t 3% A NEW, LARGE SCALE MINE IN THE BROOKS RANGE tl 5% THE ALASKA RAILROAD LINKED TO THE REST OF THE U.S. ——_— 52% A ROAD CONNECTS NOME TO THE RAIL- BELT HIGHWAY SYSTEM —+— 41% THE ALASKA RAILROAD IS EXTENDED TOC THE BROOKS RANGE a — 21% COMMERCIAL PRODUCT - ION OF OIL AND GAS IS GENERALLY ALLOWED IN THE NATIONAL WILD- LIFE REFUGE SYSTEM — 23% CONTROL OF A NATIVE REGIONAL CORPORATION PASSES INTO NON- ee NATIVE HANDS 21% THE KNIK ARM CROSSING 1S COMPLETED 17% THE STATE PERSONAL INCOME TAX IS RE- IMPOSED =] 5% 7-5 The data in Figure 7.2 may be interpreted as indicated by the following example: NUMBER OF YEARS OR DATE EVENT Lower Upper % Round Number of 25% Median 25% Never Number Panelists NORTH SLOPE OIL IS Ss 2 3 5 8 2 60 SHIPPED TO JAPAN ML 1985 1987 1990 15 3 66 L 10 10 15 50 2 60 Interpretation: The "S" row summarizes predictions for the "soonest" (10% probability) the event will occur; the "ML" row summarizes data for "most-likely" (50% probability), and the "L" row summarizes data for the "latest" (90% probability). For the ML row, 1985 is the lower quartile limit, 1987 is the median, and 1990 is the upper quartile limit for the 85% of the panel who felt the "most-likely" (50%) probability level would be reached. 15% of the panel, however, predicted that the “most-likely" level would never be reached. The data for the row came from ROUND 3, with 66 panelists responding. The "S" and "L" rows are interpreted in the same manner, except years to the event are given in place of calendar years. 7-6 Meaning: The previous “interpretation” explains how to read the data table. In practical terms: - The "% Never" column shows that only 8% of the panelists believe that the event has less than a 1-in-10 chance of occurring; only 15% believe that it has less thana 50-50 chance, and 50% (half the panel) believes that the event has less than a 9-out-of-10 chance; the other halfof the panel believes it has at least a 9-out-of-10 chance, A practical interpretation is that this is a fairly like- ly event. A rational bettor would bet on its occurrence. - The "Median" column gives the best estimates of the date of, or the years from now to the occurrence at a given chance level. There is a l-in-10 chance that it will take place within 3 years from now (S row); a 50-50 chance it will take place on or before 1987 (ML row); and a 9 out of 10 chance it will take place within 10 years from now (L row). These time estimates reflect the views of those panelists who said the given chance level was possible. The "Lower 25%" and "Upper 25%" columns show the varia- bility of panel member time estimates, For example, the S row shows that a 1-in-10 chance will be reached from 2 to 5 years from now; the ML row shows that a 50-50 chance level will be reached between 1985 and 1990; and the L row shows that a 9 out of 10 chance level will be reached between 10 and 15 years from now, A practical interpretation is that the most likely time for the event is about 1987 (Median/ML column/row). The event is very likely to have taken place by 1993 (add the 10 years in the L row/Median column to 1983). - The most usefull information is in the "Median" and the "% Never" columns, as illustrated above, However, very large differences and very small differences between the "Lower 25%" and "Upper 25%" column values in each row indicate high disagreement or high agreement on timing by panelists. In this case, there is high agreement on timing. Figure 7.2 DETAILED EVENT FORECASTS NUMBER OF YEARS OR DATE * Lower Upper % Round Number of 25% Median 25% Never Number Panelists The TransAlaska 071 Pipeline permanently shut down Bering Sea offshore oi] production exceeds 500,000 barrels daily ae Alaska receives an exemption from the Jones Act North Slope oi] is shipped to Japan World scale petrochemical plant in Alaska mMwr mwP mwwr Completion of the Alaska Pacific LNG plant on the Kenai Peninsula For Commercial production of Beluga Coal Mm Ww PrP ee Major synthetic fuel production from Alaskan coal within the State First Susitna dam on line. Both Susitna dams on line S=Soonest, ML=Most-likely, L=Latest * "Never" percentages for quartile years are occasionally inconsistent for soonest, most-likely, and latest. Shifts in panel expectations due to round feedback, current events, or greater consideration of interactions are represented in the most likely predictions from ROUND 3, which can be used to "adjust" the inconsistent data. 7-8 FIGURE 7.2 DETAILED EVENT FORECASTS (continued) NUMBER OF YEARS OR DATE Lower Upper % Round Number of 25% Median 25% Never Number Panelists Rural Electrification grids around most major bush communities Most major bush communi- ties tied into statewide electrification grid An aluminum processing plant located in Alaska Value of bottomfishing exceeds that of salmon Bottomfishing estab- lished as a major industry Doubling of Alaska's present onshore fish pro- cessing capabilities Alaska becomes a major exporter of agricultural products Most Alaskans no longer characterize our economy as "Boom/Bust" Large scale marine mining of nonfuel minerals from offshore areas close to Ak Quartz Hill Mine shipping commercial quan- tities of molybdenum S=Soonest, ML=Most Likely, L=Latest 7-9 FIGURE 7.2 DETAILED EVENT FORECASTS (continued) NUMBER OF YEARS OR DATE Lower Upper % Round Number of 25% Median 25% Never Number Panelists A new, large scale mine in the Brooks Range The Alaska Railroad is linked with the rest of the U.S. A road connecting Nome to the current railbelt highway system The Alaska Railroad is extended to the Brooks Range The Knik Arm crossing is completed Commercial production of gas or oil is generally allowed in the National Wildlife Refuge System Control of a Native regional corporation passes into non-Native hands Alaska population peaks and begins to decline The State personal income tax is re-imposed The Capital is moved from Juneau S=Soonest, ML=Most Likely, L=Latest 7-10 Figure 7.3 PANEL RANKING OF EVENT DESIRABILITY % OF PANELISTS CHECKING EACH CATEGORY EVENT ~w DESIRABLE “! DESIRABLE i— VERY UN- VERY | DESIRABLE The TransAlaska oi] pipeline permanently shut down Bering Sea offshore oi] production exceeds 500,000 barrels daily Alaska receives an exemp- tion from the Jones Act North Slope oi] is shipped to Japan World scale petrochemical plant in Alaska Completion of the Alaska Pacific LNG plant on the Kenai Peninsula Commercial production of Beluga Coal Major synthetic fuel production from Alaskan coal within the State First Susitna dam on line Both Susitna dams on line Rural electrification grids around most major bush communities Most major bush communi- ties tied into statewide electrification grid An aluminum processing plant located in Alaska Value of bottomfishing exceeds that of salmon 7-11 Figure 7.3 (continued) EVENT ———————————————————————— Doubling of Alaska's present onshore fish pro- cessing cababilities % OF PANELISTS CHECKING EACH CATEGORY Ak becomes a major exporter of agricultural products Most Alaskans no longer characterize our economy as "Boom/Bust" Large scale marine mining of nonfuel minerals from off- shore areas close to Alaska Quartz Hill Mine shipping commercial quantities of molybdenum A new, large scale mine in the Brooks Range The Alaska Railroad is linked with the rest of the U.S. A road connecting Nome to the current railbelt highway system The Alaska Railroad is ex- tended to the Brooks Range Commercial production of gas or oi] is generally allowed in the National Wildlife Refuge System Control of a Native region- al corporation passes into non-Native hands. Alaska population peaks and begins to decline The State personal income tax is re-imposed The Capital is moved from Juneau 7-12 Cross-Impact Analysis Certain events are likely to interact in such a way as to alter each other's probability or time of occurrence. Understanding these interactions, or cross- impacts, can improve the quality of a forecast. Unfortunately, incorporating explicit techniques to obtain cross-impact data adds substantially to the complexity of a Delphi questionnaire and greatly increases the time panelists would need to spend formulating their responses. Furthermore, generally agreed upon methodology for cross-impact analysis has yet to emerge. For these reasons explicit cross-impact questions were not incorporated into the questionnaires. However, panelists in responding to the questionnaires implicitly considered event interactions - particularly in ROUND 3 with its stress on consistent sce- narios. Two aspects of these implicit cross-impact interactions are analyzed here. The first explores the possibility that panelists visualized the occurrence (or non-occurrence) of certain events as being linked together as pairs. The second explores how the predicted time of one event was affected by the predicted time of another event - in other words, the lead/lag relationship between events. In ROUND 3, which emphasized the sequence of events, panelists first identified those events not likely to occur and then predicted the years of occurrence for the remaining events. By splitting the panel into those that believed each event would occur and those that responded "never," event pairs could be ana- lyzed for their cross-impact. Figure 7.4 shows the event pairs that were linked together more often than would be the case if they were independent events. The major limitation of this ana- lysis is that events that almost all panelists believe will happen cannot be included. For example, the cross impact of "a new large scale mine in the Brooks Range" on other events cannot be analyzed using this approach. However, a lead/lag analysis can be performed, and the results are summarized on page 7-15. 7-13 Figure 7.4 PAIRED EVENT OCCURRENCE CROSS-IMPACTS Actual % of Panel "Pairing" Events Expected % of Panel "Pairing" if Events are Independent EVENTS The Alaska Railroad is linked with the rest of the U.S. The Alaska Railroad is extended to the Brooks Range A road connects Nome to the Railbelt high- way system Control of a Native regional corporation passes into non-Native hands Alaska receives an exemption from the Jones Act North Slope oil shipped to Japan The Alaska Railroad is linked with the rest of the U.S. A road connects Nome with the Railbelt high- way system North slope oi] shipped to Japan World scale petrochemical plant in Alaska Note: The difference between these percentages is a measure of linkage between events. 7-14 Analysis can also clearly identify the sequence of events that the panel expects. For example, one panelist could expect event A in 1990 and event B in the year 2000. A second panelist could expect event A in 2005 and event B in 2015. If we analyze only the years, the overlap between Bl and A2 (shown below) confuses the picture when, in reality, both panelists expect A to occur 10 years before B. Al Bl A2 B2 Figure 7.5 summarizes this analysis, which in each case is based on those panel- ists who believe both events of the pair will occur. One event pair is not included in the table as no clear consensus emerged indicating which event will occur first; however, "a new large scale mine in the Brooks Range" and “the Alaska Railroad is extended to the Brooks Range" were given the same date by more panelists than any other event pair. Slightly more panelists expect the mine to precede the railroad than expect the railroad to precede the mine. Figure 7.5 LAGS BETWEEN EVENTS # of Panelists who predicted: A: First Event Median Years K before B B: Second Event Between Events Same Time B before A A: North Slope oil shipped to Japan : Completion of the Pacific Alaska LNG plant on the Kenai Peninsula : North Slope oi] shipped to Japan : World Scale petrochemical plant in Alaska : Alaska receives an exemption from the Jones Act : World scale petrochemical plant in Alaska : The Alaska Railroad is extended to the Brooks Range : The Alaska Railroad is linked with the rest of the U.S. : The Alaska Railroad is extended to the Brooks Range : A road connects Nome to the railbelt highway system : Commercial production of Beluga Coal 10 : The Alaska Railroad is linked with the rest of the U.S. 7-15 Second Wave Projects Predictions of major "first wave" events have been presented earlier. Figure 7.6 summarizes the panelist's responses to a request to identify the "second wave" of projects. It should be noted that several of these events - @.g., an aluminum industry in Alaska - are dependent on the actual occurrence of one or more of the major events discussed earlier. Figure 7.6 SECOND WAVE PROJECTS LE EEE Alaska Railroad extended to South Western Alaska Energy intensive industry in the railbelt area; e.g. aluminum or petrochemicals Widespread extraction of minerals Oil pipeline to the lower 48 Protein products from excess fish waste Industrial utilization of excess heat from petroleum facilities Construction of wind powered fertilizer plant in the Aleutians Construction of "Dome" cities Trade with China Major Arctic Research program Game ranching Small natural gas distribution pipelines Coal liquification/gasification Aquaculture in Alaskan waters Sheep and cattle ranching in the Aleutians Major ski resort in the Kenai mountains ne eee U EEE EEE 7-16 o:.0 0.0 CHAPTER 8 ENERGY SUPPLY AND DEMAND ENERGY EVENTS TRENDS IN ENERGY DEMAND SPACE HEATING AND ELECTRIC POWER GENERATION SOURCES OF ENERGY FOR ELECTRIC POWER vy Chapter 8 ENERGY SUPPLY AND DEMAND This chapter focuses on in-state use of Alaska's energy resources rather than on the export of such resources; export predictions have already been discussed in Chapter 6. However, export is a factor impacting in-state use because projects may be dependent on export for their total economic viability, but once started these projects may allow the use of energy resources within the state. For example, if a natural gas pipeline is built from Prudhoe Bay to tidewater, that gas could then be available for space heating and power generation in Fairbanks. Or if Beluga coal is developed for export, then it may also be more economical the use some of the coal in the generation of electricity for the Railbelt. The following general observations summarize the panel's position on in-state energy supply and demand: @ Energy for Alaskans was considered to be a major Alaskan issue by approximately a third of the panel. Among the 26 specific develop- ment issues "assuring cheap and abundant electric power" was ranked sixth in current importance and seventh in importance in the year 2000 (see figures 4.3 and 4.5). e@ In assigning relative private sector/State responsibilities, "assur- ing cheap and abundant electric power" had the highest percentage of responsibility assigned to the State of all specific development issues. : @ Almost half of the panel felt that providing stable and inexpensive power was one of the three most important actions the State could and would undertake to encourage economic development. e 75% of the panel expects Susitna to be built, with a median comple- tion date of 1994 for the first dam. @ The panel assigned the highest likelihood to a "pipeline to tide- water" for use of North Slope gas, although a quarter of the panel believes continued re-injection or use in enhanced oi] recovery is the most likely use. e@ Energy systems that are costly and difficult to maintain were con- sidered to be the second most critical problem area for rural Alaskan communities. In general, panelists did not expect this problem to be fully resolved before the year 2020. 8-1 @ The panel does not expect alternative energy sources to play a sig- nificant role in power generation during the next twenty years, al- though more alternative fuels will be used for space heating. These alternative fuels, along with better insulation, are expected to play a major role in solving the energy problem in rural Alaska (see Fig- ure 9.2). e 65% of the panel expected power grids to be used to reduce rural energy problems by the year 2000. Energy supply and demand was addressed in the first two rounds by asking the panelists to forecast energy events and trends in fuel use for the generation of electricity. In the final round questions also focused on energy demand. In particular, panelists predicted which developments would have significant impact on trends in energy demand and which policies the State would follow in coping with high energy costs in rural Alaska. Energy Events The panel's prediction of the timing of a number of major energy related events - those that affect supply, demand, or export of energy - are shown in Figure 8.1. The figure was constructed using data from all three rounds, and shows the most likely year for an event's occurrence (or completion). Some energy related events that the panel, as a whole, believes will occur in the next twenty years: 1993 North Slope gas reaches market 1995 First Susitna dam completed 2003 Both Susitna dams completed 1993 Commercial production of Beluga Coal 1992 Completion of the Pacific Alaska LNG plant 2003 Electrification grids around most rural communities Figure 8.1 MAJOR ENERGY RELATED EVENTS EVENT YEAR OF EVENT'S OCCURRENCE (COMPLETION) 1990 2000 2010 2020 % Never North Slope Gas reaches market NA (R3-Q13) First Susitna dam on line 27% (R3-013) Both Susitna dams on line 19% (R1-Q:D10) SE BERR, pe Commercial Production of Beluga 2% Coal (R3-Q13). = World scale petrochemical 46% plant in Alaska (R3-Q13) ts Completion of the Pacific 22% Alaska LNG plant (R3-013) Ste eee Electrification grids around | a | 24% most major rural communities Coe L (R1-Q:D11) An aluminum processing plant 35% located in Alaska (R1-Q:D13) pt Most major rural communities 46% tied into a statewide elec- trification grid (R1-Q:D12) Key: The length of the shaded pentagon shows the mid-range (middle fifty percent) time estimates given by those panelists who believed the event would happen with the peak showing the median date. The percentages of panelists who felt the 50% probability point would not be reached were is shown in the "never" column. (See Chapter 7 for additional details on these events.) 8-3 Trends in Energy Demand Future energy demand is a function of changes in lifestyle, improvements in tech- nology, population increases and decreases, and industrial developments. While this study provides estimates for population growth rates and dates of project developments, it could not address the mathematical relationships between those variables and energy demand, although in ROUND 3 the panel did identify the three most significant trends impacting energy demand. The panel chose better insula- tion and more fuel efficient vehicles as the primary trends reducing fuel con- sumption, and changes in population density and rural electrification as the primary trends increasing fuel consumption. Further details are included in Figure 8.2: Figure 8.2 TRENDS AFFECTING ENERGY DEMAND % Selecting Each Trend as One of Three Most Significant Trend Will Trend Will Increase Decrease Demand Demand oe eee POSSIBLE TREND Improved insulation in new buildings More fuel efficient vehicles Conservation through retrofit construction Shift in the housing mix (multi vs single) Conservation by lifestyle changes in large and small cities Use of public transit Change in the amount of travel Lifestyle changes in Bush Alaska Shift in urban/rural population split Rural electrification Change in population density Other: (please specify) (R3-016, n = 65) 8-4 Space Heating and Electric Power Generation The future fuel mixes for power generation and for space heating are presented in Figures 8.3-8.6. In the first two rounds panelists estimated the use of oil, gas, coal, and hydro for power generation relative to current levels. These pro- jections are detailed in Figure 8.3. By using these projections and current gen- eration figures, Figure 8.4 was constructed to show the relative future shares for each fuel. For power generation panelists clearly believe that oi] use will not increase, and that gas and coal use will increase at similar rates. The panel also predicted an increase from 13.3% to 18% in the share of hydroelectric, even without Susitna, while hydro surpassed gas as the principal fuel if Susitna is built. The panel stated in ROUND 1 and reaffirmed in ROUND 2 that demonstra- tion projects and commerical applications from alternative energy sources would occur, but generation from these additional fuels will not be a significant per- centage of the state's total (Figure 8.5). The percentage of households heating with wood was predicted to decrease in Fair- banks and Southeastern, but increase in Anchorage, Mat-Su Borough, and Yukon- Koyukuk. Use of coal and solar were expected to increase in all of these areas. Figure 8.3 DETAILED BREAKDOWN OF FUELS FOR POWER (lower quartile -median- upper quartile) Future Levels Relative To 1983=100 ACTUAL | PUBLIC UTILITY ENERGY SOURCE FOR POWER 1990 2020 64% po | 100-120-140 100-130-160 100-150-200 100-100-110 90-100-115 80-100-120 Hydroelectric No-Susitna 110-120-140 125-150-200 150-200-250 Yes-Susitna 110-150-200 250-400-800 400-600-1200 100-110-125 100-125-150 100-150-200 8-5 Figure 8.4 SOURCES OF ENERGY FOR ELECTRIC POWER Susitna Excluded 1990 2000 "2020 G 65.9% G 64.6% G 62.0% Cc 11.3% Cc 11.7% Cc 12.4% Oo 9.5% O 8.6% Oo 8.3% H 13.3% H 15.1% H 18.0% Susitna Included 1990 2000 2020 G 63.8% G 46.4% G 39.8% © 5.3% © 6.2% Cc 10.9% Cc 8.4% Cc 8.0% © 9.2% H 16.1% H 39.1% H 47.4 KEY. G-GAS, O-OIL, H-HYDRO, c- COAL 8-6 Figure 8.5 POWER GENERATION WITH ALTERNATIVE FUELS 1% <1% <<1% 2% (much less than 1%) : 7 % total electric energy for Alaska generated by alternative energy sources in the year 2000. % of panel expecting at at least experimental use Figure 8.6 FUEL USE FOR SPACE HEATING Average Percentage of Households Heating with Each Fuel Anchorage Fairbanks 17% Southeastern 20% 27.0% Mat-Su Borough 6% 8.5% Yukon-Koyukuk 6% 9.0% Current estimates from the 1983 Long-Term Energy Plan (Working Draft). (R3-018, n = 62) 8-7 05.0070 CHAPTER 9 THE RURAL ALASKA VIEWPOINT RURAL PROBLEM / ISSUE AREAS ENERGY TRENDS ROLE OF THE NATIVE CORPORATIONS PROBABLE CHANGES IN RURAL ALASKA | Chapter 9 THE RURAL ALASKA VIEWPOINT This chapter is based on two sources. First, each of the three Delphi rounds contained questions that focused on rural Alaska or the Native corporations. Second, the three formal Delphi rounds were supplemented by structured inter- views conducted in five Alaskan rural communities. The intention of these interviews was to obtain the views of those Alaskans who are more familiar and comfortable with the oral tradition than with written questionnaires. It should be noted that the formal Delphi panel did include a number of recognized rural Alaskan leaders (see Appendix A), and their predictions are part of the formal panel response. This chapter outlines the results of those interviews in juxtaposition against the views of the formal Delphi panel on the problems of rural Alaska and the current and eventual role of the Native corporations in Alaska's development scenario. Not every area examined by the formal Delphi panel was included in the interview process. For example, our interviewers found that there was very little interest and/or knowledge of major projects or events impacting the rail- belt area. Certain attitudes were expressed in every community visited, but some disparities exist between the responses of the rural Delphi panel members and the community representatives personally interviewed. The following are a few of the concerns expressed by nearly all of those interviewed: e The majority of those interviewed see development taking place at a controlled pace with particular emphasis on the protection of the environment and the subsistence harvest. Most areas do not appear to want industrial "staging areas" in their communities. e@ Many village elders express the essence of Native lifestyle as the maintenance of the Native personal and community identity - empha- sizing respect, sharing of food, and a quasi-commercial ownership of community land and materials. In general, the cash economy is not seen as antithetical to this lifestyle, although lifestyle and subsis- tence are inter-related, and most want subsistence retained. Several expressed their concern that those in the Railbelt and in Juneau equate subsistence with the Native lifestyle. e Many stated that they wish the State to provide the infrastructure and/or intitial subsidies necessary to make certain marginal projects immediately viable, but to constrain the projects in terms of location, pace, and pattern of implementation. 9-1 @ When questioned about what each saw as the most significant problem in their village, region, or in the whole of rural Alaska, the majority identified: Employment Opportunities - Failure to hire locally for develop- ment projects, inadequate training, and traditional vs. modern attitudes toward work habits. Energy Systems - Extremely high cost of importing fuel oil, undependable or underdeveloped alternative energy systems, out- dated or underpowered generating systems. Housing - Shortages, poor construction, lack of adequate heating and insulation. The Cyclical Economy - Subsistence vs. the cash economy, high percentage of transfer payments, seasonal employment problems, failure of Native corporations to properly invest in the local economies. e@ Formal Delphi panelists, when ranking a list of rural problem areas, also identified employment opportunities, energy systems, housing, and the cyclical economy as most important. Furthermore, according to the panel, only the housing problem is likely to be resolved by the year 2000. @ When asked about solutions to high rural energy (fuel oi1) costs, the majority of the Delphi panel predicted in 1990 the approaches would be better insulation, price subsidies, and substitution of other energy sources; by the year 2000 the majority predicted that subsitution, regional power grids, and new technology would be the approaches used. e@ When asked about the actions or roles of Native corporations, the majority of panelists indicated that, in general, Native corporations would open (lease or sell) their land for development, continue to be controlled by Natives and be a unified political force. Panelists also indicated that the Native corporations would not emphasize Native cultural values over economic performance when the two conflict. Questions pertinent to rural Alaskan development were part of all three rounds, and many of the results have already been outlined in the previous chapters dealing with issues, the economy, events, and energy. In ROUND 3 the Delphi panel responded to a number of specific questions dealing with rural problems in general, the Native corporations, subsistence and lifestyle issues, and the cost of energy. As the formal Delphi rounds were conducted, the parallel rural inter- view process was designed and implemented. 9-2 As noted in the methodology chapter, the five villages were chosen using the following criteria: location, cultural-economic transition, population, and development potential. In keeping with the original Delphi process, comments of those interviewed are identified only by their respective communities. Figure 9.1 provides a convenient reference guide to the basic aspects of each community in the interview series: Figure 9.1 RURAL COMMUNITIES VISITED BY THE DELPHI PROJECT TEAM Population Economic Structure Cultural Heritage (est.) Regional Corporation Village Corporation 2998 Government Jobs Inupiat Eskimo Services 75% Native Construction Arctic Slope Reg. Corp. Subsistence Ukpeaguik-Inupiat Corp. Fishing Tlingit-Haida Construction 80% Native Logging Sealaska Corporation Huna-Totem Corp. Ft. Yukon 736 Trapping Kutchakutchin- Tourism Athapascan 75% Native Subsistence Government Jobs Doyon, Ltd, Gwitchyaazhee Corp. Trapping Athapascan Subsistence 48% Native Government Jobs Doyon, Ltd. Chamai, Inc. 336 Subsistence Yupik Eskimo Fishing 98% Native ‘Calista Corporation Nunakauiak Yupik Corp. Toksook Bay When approached with the idea of forecasting the future, most of the rural com- munity residents did not want to venture forecasts for areas beyond their own village or region. Most did not wish to even consider beyond the year 2000. Comments of those interviewed typically focused on the hope of increased com- mercial activity, self-sufficient (or at least less expensive) energy systems, increased housing, continuance of the subsistence lifestyle, and strengthening of the village and regional corporations in the area of jobs, financial support, and capital improvements. 9-3 Rural Problem/Issue Areas In 1981 the Alaska Council on Science and Technology, using a Delphi-type proc- ess, identified thirteen major problems facing rural Alaska communities. In ROUND 3 the panel was asked to rank these in order of their perceived importance and to indicate when, if ever, those problems would be resolved (see Figures 9.2 and 9.3). In the personal interviews the complete list was shown to each person and comments solicited. The following data describe the four problems consistently identifyed by those interviewed and also targeted by a large number of the Delphi panel as well. It should be noted that the interviewers were instructed to pursue the problems seen as significant to each particular community and therefore, some problems are not explored fully in every community. The synopsis of comments in each case is based on direct quotes from those interviewed; these quotes are the "data" obtained from the village visits, and the synopses are the data tables. These comments should be interpreted as illustrative of significant village viewpoints, but not as definitive statements of total village or rural positions. EMPLOYMENT OPPORTUNITIES Lack of economic diversification; few non-seasonal jobs; loss of young people; greater government services needed; lack of training. This issue was ranked as important by 80% of the Nelphi Panel. Synopsis of Comments from the Rural Communities: Barrow: High unemployment year round in Barrow; the North Slope Bor- ough and the Arctic Slope Regional Corporation have been working together to bring new industry to Barrow - we are no longer a village and cannot lean back on the subsistence lifestyle; must be intearated with cash economy to survive. Ft. Yukon: Lots of opportunity in agriculture, tourism, and trapping. Hoonah: The village corporation (Huna-Totem) is working hard to train share-holders and develop industries that are complementary to the traditional lifestyles. Crabbing and other commercial fisheries, construction, and service industries have tremen- dous employment potential. McGrath: Generally this is a subsistence economy, but you cannot pay for fuel oi] with moosemeat. There has to be a balance - there are bad feelings here about the oi] companies and about State and federal agencies that work out of McGrath but don't hire locally. 9-4 Figure 9.2 PERCENTAGE OF PANELISTS RANKING RURAL PROBLEM AREAS AS MOST IMPORTANT Percentage of Panel Ranking Issue as: Problem Area Not in lst | 2nd | 3rd | 4th 5th Top 5 EMPLOYMENT OPPORTUNITIES 44% | 12% 8% 20% 20% ENERGY SYSTEMS 18% | 18% | 17% 4% 11% 32% HOUSING 11% 9% | 12% 12% 42% THE CYCLICAL ECONOMY 11% 5% 6% 52% TRANSPORTATION 2% 50% IMPORT DEPENDENCE 3% 57% UTILITIES -0- 54% CONTROL OF DEVELOPMENT 5% 74% ECONOMIC SUPPORT MECHANISMS 2% § 3 78% FACILITIES DESIGN -0- 81% CAPITAL FACILITIES PLANNING 2% DEVELOPMENT PLANNING PUBLIC SERVICES (R3-0:19, n=66) 9-5 Figure 9.3 PERCENTAGE OF DELPHI PANELISTS INDICATING BY WHAT TIME (IF ANY) THE THIRTEEN RURAL PROBLEMS MIGHT BE RESOLVED Percentage of Panel Indicating Possible Solution By: Problem Area No 1990 | 2000 | 2020 | Beyond | Never | Reponse* EMPLOYMENT OPPORTUNITIES -0- 18% 23% 23% 3% 33% ENERGY SYSTEMS 3% 18% 23% 18% 3% 35% HOUSING 3% 27% 12% 14% 3% 41% THE CYCLICAL ECONOMY TRANSPORTATION IMPORT DEPENDANCE UTILITIES CONTROL OF DEVELOPMENT ECONOMIC SUPPORT MECHANISMS FACILITIES DESIGN CAPITAL FACILITIES PLANNING DEVELOPMENT PLANNING PUBLIC SERVICES * A large number of panelists provided responses for this question only on those issues they felt were most important (Figure 9.2); therefore, the "No Response" percentages are quite large on those issues that were not ranked among the most important issues. 9-6 Toksook Bay: Toksook Bay is modernizing very slowly. Money usually comes from transfer payments and the sale of fish. Unemployment is very high, but nearly everyone upholds the subsistence way of life so that any money received can be spent on discre- tionary items. ENERGY SYSTEMS Costly and difficult to maintain. This issue was ranked as important by 69% of the Delphi Panel. Synopsis of Comments from the Rural Communities: 2 ees _ From ene Rural Communities : Barrow: Improved construction to emphasize energy conservation would help enormously. We are fortunate to have natural gas and no longer have to deal with tremendous home heating oi] bills. The problem of heating and electrical generation in the bush communities (dependent on fuel oil) might be approached in three stages; 1) upgrade or replace current systems, 2) improve standing structures and build new structures to be energy efficient, and 3) encourage personal conservation. We are at stage 2 right now and the future looks very promising. Ft. Yukon: Solar energy would work here...it gets over 100° here in mid- summer. If somehow the Yukon could be harnessed under the ice to produce electrical energy like the old water-mill sys- tems. We definitely are opposed to that hydro project (re: Rampart Dam Project)-the one that would flood the entire val- ley. An electrical grid from Fairbanks is possible if the population of Ft. Yukon, Venetie and other area villages in- creases enough to warrant it. Hoonah: We are still getting our electrical power from Diesel genera- tors. Oil is extremely expensive. The village corporation is working with the Tlingit-Haida Electric Authority to improve the efficiency of the current system and to look at alternative energy programs. McGrath: The Diesel powered generators have to be replaced with some- thing more efficient. Oi] bills go as high as $500 per month for some families. Solar will not work here...perhaps there is some way to harness the Kuskokwim River. No one in the legislature or locally seems to be doing anything about it. Toksook Bay: Forced air heating systems were installed in many homes the last two years with much improved fuel efficiency. However, oil heat is still too costly. A few people even bought wood stoves, but there really is not much wood around...one guy is 9-7 now buying pressed logs from Seattle. Villagers are opposed to the idea of the Kisaralik Hydro Project if it will affect the subsistence harvest (appear to be convinced that it will). Many like the idea of the wind generation systems similar to the one in place at Sheldon's Point. They see this type of technology as the future means of electrical generation by the year 2000. HOUSING Poor quality; overcrowding; high cost unavailable; unsafe. This issue was ranked as important by 58% of the Delphi panel Synopsis of Comments from the Rural Communities: Barrow: Hoonah: Toksook Bay: Our #1 problem - we are far behind the needs of the community. Present housing is poorly constructed and far from energy efficient. Many residents are using the Energy Audit Program and retrofitting to improve insulation and heat flow. Freight and labor costs set construction costs in Barrow at 2-3 times that of Anchorage - prices out of the reach of most families without subsidies. Housing is a very high priority in Hoonah. We conducted a survey that revealed that two to three families reside in each household - we could use 70 new homes this year. Not seen as a problem here, although many people live ten to a household. The traditional nature of the village seems to treat the village itself as a house and each actual dwelling as a room. Visitors are often unsure of who lives where. Twenty-five new homes are being built this summer by BIA to accommodate the young couples currently living in extended family situations. 9-8 THE CYCLICAL ECONOMY Sense of impermanence; lack of attention to the future (planning); migration/ transiency; social problems; unbalanced cash flows; deteriorating communities. This issue was ranked as important by 49% of the Delphi Panel. Synopsis of Comments from the Rural Communities: Barrow: Ft. Yukon: Hoonah: McGrath: Toksook Bay: Those in Fairbanks and Anchorage are insensitive to our situation. You take public services and modern conveniences for granted and then give us a hard time when we want the same things (re: recent negative press coverage of the volume of North Slope Borough spending on public utility installa- tion). Our economy has the built-in cost of transportation - often doubling or tripling prices as you know them in Anchor- age. Future planning in this area should be left up to those who know it best - the people of the North Slope Borough. The basic industry here, at least during the winter months, is trapping - $200-500,000 last year alone. We have a small tourism program here and, up until two years ago, Wien was promoting a ground tour program that had a lot of potential. Biggest problem here appears to be lack of interest in deve- lopment and economic stability... We can do a better job of managing our resources than anyone else. We are conducting fisheries research - much improve- ment needed there. We had a public meeting (re: Huna-Totem Village Corporation) and invited all the village elders. We asked them if they wished for us to work on preserving the subsistence economy or to develop our resources and integrate an economy based on wages. They all said they wanted us to be industrious and to make jobs for the young people so they will stay here. That is just what we are doing. More and more people will work for wages in McGrath in the future. Many more non-Natives have moved here over the last ten years and have brought with them modern ideas of work and compensation. Oil and gas development will grow here...but so far the exploration teams have brought in their own people. Most bush people are simply not qualified for those jobs. Very little real economic planning going on here. The economic base will remain primarily commercial fishing, State and federal government employment and transfer payments. Reduction of income in any of these areas will have a dra- matic impact on the community. Private sector employment seen as increasing only slightly, possible new jobs from the vil- lage corporation's Camai Air. Basically, Toksook Bay will re- main a subsistence based traditional economy. 9-9 Energy Trends In ROUND 3 the Delphi panel was asked to choose, from a list of eleven energy trends, the three that will have the most impact, positive or negative, on energy demand in Alaska. Three trends were specifically relevant to the rural Alaska communities, and were also considered among the three most important by the Delphi panel: e@ A shift in the urban/rural population split was considered important by 28% of the panel, with 23% predicting it would increase demand and 5% predicting it would cause a decrease in demand. e Lifestyle changes in Bush Alaska were considered important by 26% of the panel, with 23% predicting that overall changes would increase demand and 3% predicting that a decrease would occur. e Rural electrification was selected as an important trend by 29% of the panel, with 26% predicting an increase in demand and 3% pre- dicting a decrease. The rural community members that were interviewed indicated that these trends would all have the impact of significantly increasing energy demand in their re- gions. The extremely high cost of heating oi] and diesel fuel used to power electrical generators was mentioned by the majority of those interviewed in rural Alaska. The Delphi panel was asked to indicate how these problems would be dealt with in 1990 and the year 2000. (Figures 9.4 and 9.5) 9-10 Figure 9.4 SOLUTIONS TO HIGH ENERGY COSTS Percentage of Panel Indicating Solution or Approach Use of Solution in Given Year 1990 2000 Solved by new technology Regional power grids Substitution of other energy sources * Better insulation in buildings Let prices limit demand Price subsidies Other options offered by the panel The question that followed in ROUND 3 addressed the issue of alternative energy, particularly the use of wood, coal, and solar (fully detailed in the energy chapter of this report). As one indication of substitution, the panel estimated the use of alternative energy in the Yukon-Koyukuk region increas- ing by 6.9% by the year 2000. Figure 9.5 CHANGING ENERGY COST SOLUTIONS 1990 2000 b= 4) KZLLA. 90 % Selecting 804 70 | 60 L 50 | 40L 30 | 204 10 f Insulat OthEner (R3-Q17,n=64) 9-11 Role of the Alaska Native Corporations Alaska Natives, through their corporations, control a large portion of privately held land in Alaska and have the potential of being a major force in Alaska's development future. The Delphi panel and interviewees were asked to indicate the actions or non-actions of the Native corporations. Figure 9.6 presents the results of the questions asked of the Delphi panel. Figure 9.6 ACTIONS OR ROLES OF THE NATIVE CORPORATIONS Percentage of Panel Indicating that Native Corporations: Potential Action or Roles Will = =Will_ Not Open their land for resource development Lease or sell lands to non-Natives* Distribute significant amounts of land to their shareholders Emphasize native cultural values over economic performance when the two conflict Continue to be controlled by Natives after 1991 Invest, primarily, in their region Be a unified political force in Alaska * many panelists indicated that the corporations would perhaps lease their land to non-Natives, but never sell. It is worth noting that although 76% of the panelists indicated that the Native corporations, in general, will continue to be controlled by Natives after 1991 (i.e. after the corporate stock is transferable), in their responses to the question dealing with significant events (Figure 7.3), better than two thirds of the panel expect control of a Native corporation to pass into non-Native hands before the year 2000. 9-12 Similar questions were asked of the rural interview subjects with particular emphasis on the role of their own village corporations; some general responses were: Hoonah: Ft. Yukon: Barrow: Huna-Totem is the largest village corporation in Southeast Alaska with over 700 shareholders. They are actively interested in training of the workforce, in logging, fisheries development, and other areas with viable employment opportunities in this area of the state. The village corporation believes that it is important to convince the shareholders that cash dividends will be small and at times nonexistent while the corporation grows, but in the long run they will profit by holding on to their shares. Much concern here that people will sell their shares in Sealaska. The primary goal of the village corporation should be training of the workforce; second, improving the quality of life for its shareholders and not just setting themselves up in another giveaway program. Everyone is getting real nervous about 1991. The first goal of the corporations, whether village or regional, is to be viable, ongoing business concerns. After that they must be interested in improving the quality of life for their shareholders. In reference to the specific questions asked of our Delphi panel, the general responses made by those interviewed in rural communities: Hoonah: Barrow: Toksook Bay: Ft. Yukon: McGrath: Native Corporations will (will not) open land for resource Development: Cee eee eee ee EAI Yes, but on our terms only. Absolutely-already underway. We have no power to prevent it in the areas outside of our land holdings - within our area we intend to develop the resources as long as it does not disrupt the subsistence harvest. Yes, the sooner the better - but prefer renewable resource development. Oil development is on its way - every season there are more exploration teams out here. Why shouldn't the corporations cash in on that opportunity? 9-13 Hoonah: Barrow: Tooksok Bay: Ft. Yukon: McGrath: Consensus: Consensus: Native Corporations will (will not) emphasize Native cultural performance when the two conflict: No - our elders have decided that progress is important to the young people too and that getting involved with it is better than being run over by it. Cultural values will actually be made stronger because now the young people can stay in the village for work rather than be separated from their culture in the big cities. Cultural values must take precedence - you can recover from a bad economic year, but how do you recover lost values and traditions? Cultural values most important. Probably economic performance first - lots of conflict here over that subject, probably holding up progress. Economic performance must be more important in this modern age. Native Corporations will (will not) continue to be controlled by Natives after 1991: Yes, but there will be some power struggles and it will take a stronger education program to prevent shareholders from selling out. They must be taught that the real value of those shares is their future, not the current cash value. Native Corporations will (will not) be a unified political force in Alaska: In the end, yes, although conflicts do exist between the pro and slow growth factions. There is much concern that organiza- tions such as AFN will not be able to hold the unified body of organizations together. Everyone worries about the survival of the subsistence option and the future of Native cultural values and lifestyles. As previously discussed, there is also a growing concern over the number of shareholders that will sell their stock in 1991. 9-14 In ROUND 3 the Delphi panel was asked to describe the significant changes that will be experienced by the majority of rural Alaskan communities in the years from 1990 to 2020, according to the panelist's chosen scenario (see Chapter 10 for explanation). Their responses have been grouped into topical areas, although some responses clearly cross topical boundaries: @ Population growth; many older, traditional villages will cease to exist; fewer people living in rural communities; more young people will move to the cities to adopt the lifestyles they really want. ® Decreased cost for fuel supplies; infrastructure will improve; decentralization from urban with logistic outlets in the bush; more technology; higher standards for education, housing, health, and communications facilities. @ Rural leaders will become more influential; more participation in regional and state decision making process; more local gov- ernment land use and control through zoning; increased separa- tion between the values and goals of the village corporations and the regional corporations. ® Significant increases in conflicting interests and values between villagers; increase in anti-white sentiment; emergence of distinct class divisions; continuing struggle with alcoholism and drug abuse; changes for the beter with increased cultural heritage awareness. ® Concentration of economic control outside of the community; subsistence lifestyle eroded; greater dependence on cash; more tourists; less transfer payments; increased commercial activity; become more self-sufficient, particularly in energy; more job opportunities; increased competition for fish and game resources. 9-15 Oz), O2705:9 OO CHAPTER 10 ALTERNATIVE SCENARIOS PANEL EVALUATION OF PRELIMINARY SCENARIOS DELPHI PANEL SCENARIOS LOW POPULATION SCENARIO MODERATE POPULATION SCENARIO HIGH POPULATION SCENARIO ANALYSIS AND COMPARISON OF SCENARIOS WN Chapter 10 ALTERNATIVE SCENARIOS In previous chapters the panel's predictions were categorized by topic; in this chapter alternative "scenarios" of Alaska's future are constructed. These sce- narios are internally consistent and apparently plausible views of the future - emphasizing the impact of trends, policies, and events on each other. Typically, scenarios are constructed through either individual reflection or through a direct group interaction process. Whichever way the scenario is conceptualized, the construction process includes the following steps. Possible scenario components are identified and related to each other in trial combinations; these combinations are then evaluated for consistency (a scenario cannot contain any mutually exclusive elements, nor can events be combined in illogical time sequences) and plausibility (the scenario must appear to be a realistic and possible future outcome). In this case, scenarios were constructed using the "integrated view" that was emphasized in ROUND 3. In addition, the panel's reaction to three preliminary scenarios from ROUND 2 is reported. Panel Evaluation of Preliminary Scenarios A major objective of the research design was to insure that more than a set of isolated predictions resulted. Therefore, in the second round panelists estimated the likelihood of preliminary scenarios and critiqued their contents. At the time, DCED was in the process of developing the State's long-range energy plan which included, in draft form, three scenarios that could be used as a basis for panelist's preliminary predictions. The full text of the scenarios as presented to the panel can be found in Appendix B, Questionnaire #2; the sce- narios are also briefly summarized in Figure 10.1. Figure 10.1 ENERGY PLAN SCENARIOS Scenario #1 This scenario concentrates on preserving traditional and con- temporary Alaskan "lifestyles." The policies of government emphasize financial security, low risk, and a generally slow development process. The two basic objectives are: 1) to maximize the individual net worth of all resident Alaskans through State provided services, and 2) to preserve and en- hance the values embodied in Alaskan lifestyles. Economic growth is focused on sectors that are not labor intensive. 10-1 Figure 10.1 Energy Plan Scenarios (continued) Scenario #2 This scenario is similar to the current development and growth situation, in which the State identifies and develops large scale industrial or infrastructure projects. The basic intent is to create growth through development of Alaska's natural resources on a project by project basis without dras- tically changing the lifestyles of most Alaskans. The major- ity of residents, particularly those living in the railbelt area, will experience a rise in income. Bush residents will benefit from the development of local resources and Native residents will benefit through investment by their village and regional corporations. Scenario #3 Scenario three could be termed a "high growth" view of Alas- ka's future, but is only possible if world markets return to a higher level of activity. Under this scenario the State adopts a very strong development policy focusing on export of natural resources. However, such a policy could include greater environmental sacrifices and pressure for change in "Alaskan" values. Under this view, population would increase rapidly. The percentage of panelists selecting each scenario: As Closest to As Next Closest to Describing Future Alaska Describing Future Alaska Scenario #1 18.8% 21.7% Scenario #2 62.5% 35.0% Scenario #3 18.8% 43.3% Scenario #2, which projected a future growth pattern similar to the current pat- tern, was the first or second choice for realistic development by all but one of the Delphi panelists. Scenario #3, projecting even faster growth, was the over- whelming second choice. Panelists clearly felt that the pace of development and growth would match or exceed the present level, and that a generally slow and cautious development process is not very probable. 10-2 Delphi Panel Scenarios The questionnaire for ROUND 3 was designed so that each panelist was in effect building an individual scenario by answering the questions; each returned questionnaire (there were 66) represents a separate scenario. However, it would not be practical to present that many individual scenarios in this report, and therefore, a method for constructing group scenarios had to be selected. The method, or decision rule, used was to classify panelist scenarios by their prediction of future population growth rates. Population is both a significant variable in its own right, and strongly related to other major variables. e@ The Low Population Scenario is based on the responses of the 10 panel- ists who predicted an average population growth rate of less than 1.75% per year. @ The Moderate Population Scenario is based on the responses of the 30 panelists who predicted an average population growth rate of more than 1.75% but less than 2.5% per year. @ The High Population Scenario is based on the responses of the 16 panel- ists who predicted an average population growth rate of more than 2.5% per year. e@ The 10 panelists who predicted a growth rate of 2.5% were not included in either the moderate or high population scenarios. As the panelists fall between the two groups, their inclusion would result in less dis- tinct alternate scenarios. These three scenarios correspond to the lowest quartile (low population), the mid-range (moderate population), and the high quartile (high population). The moderate population scenario is also fairly similar to the overall panel response. For that reason, and because overall panel response has already been summarized in the previous chapters, a composite panel scenario is not reported separately here. For each of the scenarios the rules for deriving the scenario from the responses were the same. The most frequent response (mode) to any question was generally chosen as representative; in a few instances where several answers appear with virtually identical frequency, each is included in the scenario. In some cases, particularly for years of occurrence, medians rather than modes were judged to be more representative. 10-3 A note of caution is advised in interpreting the scenarios. A distinction must be preserved between plausibility (the scenario can happen) and probability (will it happen). The scenarios constructed from ‘the panel response represent several plausible combinations of events and trends, and are designed to be distinct rather than minor variations of each other. The data could also reason- ably support other plausible scenarios. While more of our panelists made pre- dictions compatible with the "moderate" scenario than with the other two alter- natives, even within the moderate group disagreement existed on virtually every point. Low Population Scenario The ten panelists who predicted an average annual population growth rate of 1.75% or less, aS a group, generally adhered to the following scenario: Oil prices (in real 1983 dollars) do not, in the long run, stay below the current level. State policy actually follows a moderate growth path through a sequence of large-scale industrial and infrastructure pro- jects; policy emphasizes a balance between growth and life- style/environmental preservation. State government, whose most important goals should be environmental protection, economic diversification, and insuring planned and paced growth, actually pursues economic growth and jobs. Specific State actions to encourage development include expanding the transportation infrastructure, increasing investment and financial incentives, and making land available for private development. The major thrust of State budget spending, heyond the opera- ting budget and those capital expenditures required to main- tain minimal public facilities, is toward local public works support. Permanent fund income is put into the general state budget or development projects. The State personal income tax is re-imposed by 1989. The three industries receiving the strongest State emphasis, support, and assistance are fisheries, coal, and tourism. The oil and gas industry does not receive substantial State support in this scenario. Tourism and fisheries become roughly equal in size; coal, hard rock mining, and timber are less than one third the size of tourism, and agriculture is only one twentieth the size of tourism. Bottomfishing is established as a major industry by 1990. North Slope oi] is shipped to Japan by 1990, and by 10-4 1995 the Pacific Alaska LNG plant on the Kenai Peninsula is completed. Commercial production of Beluga coal is underway by 1990, and in the early 1990's commercial production of gas or oi] is generally allowed in the National Wildlife Refuge System. The TAPS pipeline continues to operate well into the into the next century. By the early 1990's the Quartz Hil] mine is shipping commercial quantities of molybdenum and a new, large-scale mine opens in the Brooks Range. The Knik Arm crossing is completed in the late 1990's. The Capital remains in Juneau. The Susitna project has been abandoned. No major railroad extension to the Brooks Range or rest of the United States is undertaken. In order of importance, the first and second markets for Alaska's oil and hard rock minerals are the U.S. and Japan/ Korea; for gas, wood products, and seafood, Japan/Korea and the U.S.; for coal, Japan/Korea and other Asian countries. Energy, employment, and the cyclic economy remain major rural Alaska problems. Insulation continues to be a primary solu- tion for high rural energy costs; however, toward the year 2000, new technology and the substitution of other energy sources for fuel oi] become significant. While control of a Native regional corporation passes into non-Native hands by the late 1990's, in general the Natives retain control of the corporations, open their land for resource development, and lease or sell lands to non-Natives. However, when economic and cultural values conflict, cultural values prevail more often in their decision making. The Native corporations invest primarily outside their regions, but do not represent a unified political force in Alaska. The population of Alaska grows at average annual rates of 1.7% in the 1980's, 1.1% in the 1990's, and 1.0% in the period from the year 2000 to 2020. Moderate Population Scenario The thirty panelists who predicted an average annual population arowth rate of more than 1.75%, but less than 2.50%, as a group, generally adhered to the following scenario: Oil prices (in real 1983 dollars) continue to drop, but then rise substantially above the current level. State policy actually follows a moderate growth path through a sequence of large-scale industrial and infrastructure pro- 10-5 jects; policy emphasizes a balance between growth and life- style/environmental preservation. State government's most important goals should, and do, include economic diversi fica- tion and maximizing resource development. However, the state places more emphasis on increasing economic growth than on insuring planned and paced growth. Specific State actions to encourage development include expanding the transportation infrastructure, coordinating and planning for economic development, making land available for private development, and increasing investment and financial incentives. The major thrust of Alaska state budget spending, beyond the operating budget and those capital expenditures required to maintain minimal public facilities, is toward local public works support and resource development. Perma- nent fund income is put into development projects or the general State budget. The State personal income tax is re- imposed by 1988. The four industries receiving the strong- est State emphasis, support, and assistance are fisheries, oil and gas, tourism, and coal. By the year 2000, tourism, coal, hard rock mining, and fisher- jes are about the same size industries, while timber is three-fourths’ as large, and agriculture half as large. Coal and hard rock mining, however, moderately surpass tourism and fisheries in size after the year 2000. Bottomfishing is established as a major industry by 1992. North Slope oi] is shipped to Japan by 1987, and by 1993 the Pacific Alaska LNG plant on the Kenai Peninsula is completed. Commercial production of Beluga coal is underway by 1995, and in the early 1990's commercial production of gas or oil is generally allowed in the National Wildlife Refuge System. The TAPS pipeline continues to operate well into the next century. By the early 1990's the Quartz Hill mine is shipping commercial quantities of molybdenum and by 1995 a new, large- scale mine opens in the Brooks Range. The Knik Arm Crossing is completed in the mid 1990's. The Capital remains in Juneau. The first Susitna dam is completed by the late 1990's. Railroad extensions to the Brooks Ranae and the rest of the U.S., as well as a road to Nome, are completed near the year 2000. In order of importance, the first and second markets for Alaska's oi] and gas, and hard rock minerals, are the U.S. and Japan/Korea; for coal and wood products, Japan/Korea and other Asian countries, and for seafood, Japan/Korea and the U.S. Energy, employment, housing, and the cyclic economy remain major rural Alaska problems. Insulation continues to be a primary solution for high rural energy costs, but toward the year 2000 new technology, the substitution of other energy sources for fuel oi1, and regional power grids become sig- nificant. 10-6 While control of a Native regional corporation passes into non-Native hands by the late 1990's, in general the Natives retain control of the corporations, open their land to resource development, and lease or sell land to non-Natives. When economic and cultural values conflict, economic values prevail more often in their decision making. The Native cor- porations represent a unified political force in Alaska and invest primarily outside their regions. The population of Alaska grows at average annual rates of nearly 2.50% in the 1980's, 2.0% in the 1990's, and 1.5% in the period from the year 2000 to 2020. High Population Scenario The sixteen panelists who predicted an average annual population growth rate of more than 2.5%, as a group, generally adhered to the following scenario: Oil prices (in real 1983 dollars) rise substantially above the current level. State policy actually follows a moderate growth path through a sequence of large-scale industrial and infrastructure proj- ects; policy emphasizes a balance between growth and life- style/environmental preservation. State government, whose most important goals should be economic diversification, stabilizing the boom/bust cycle, and insuring planned and paced growth, actually pursues economic growth through diver- sification and providing jobs. Specific State actions to encourage development include expanding the transportation infrastructure, providing stable and inexpensive power, and making land available for private development. The major thrust of Alaska state budget spending, beyond the operating budget and those capital expenditures required to maintain minimal public facilities, is toward local public works support and resource development infrastructure support. Permanent Fund income is put into development and infrastruc- ture support. The State personal income tax is re-imposed by 1990. The industries receiving the strongest State emphasis, support, and assistance are fisheries, oi] and gas, coal, and tourism. By the year 2000, tourism, coal, hard rock mining, and fish- eries are about the same size industries, while timber is three-fourths the size of tourism, and agriculture is about half as large. 10-7 Coal and hard rock mining, however, moderately surpass tour- ism and fisheries in size by the year 2020. Timber becomes equal in size, and agriculture reaches three-fourths the size of tourism by 2020. Bottomfishing is established as a major industry by 1991. North Slope oi1 is shipped to Japan by 1988, and by 1990 the Pacific Alaska LNG plant on the Kenai Peninsula is completed. Commercial production of Beluga coal is underway by 1991, and in the early 1990's commercial production of gas or oi] is generally allowed in the National Wildlife Refuge System. A world scale petrochemical plant is in operation in Alaska by the year 2000 and the TAPS pipeline continues to operate well into the next century. By the early 1990's the Quartz Hill mine is shipping commercial quantities of molybdenum, and by the mid-1990's a new, large-scale mine opens in the Brooks Range. The Knik Arm Crossing is completed in the mid-1990's. The Capital remains in Juneau. The first Susitna dam goes on line about 1995. By 1995 the Alaska railroad is extended to the Brooks Range, and by 2000 to the rest of the U.S. A road connects Nome to the current railbelt highway system by the year 2000. In order of importance, the first and second markets for Alaska's oil and hard rock minerals are the U.S. and Japan/ Korea; for gas, petrochemicals and seafood, Japan/Korea and the U.S.; for coal and wood products, Japan/Korea and other Asian countries. Energy, employment and housing remain major rural Alaska problems. Insulation continues to be a primary solution for high rural energy costs, but toward the year 2000 new tech- nology, regional power grids, and the substitution of other energy sources for fuel oi] become significant. While control of a Native regional corporation passes into non-Native hands by the late 1990's, in general, the Natives retain control of the corporations, open their land for resource development, and lease or sell their land to non- Natives. When economic and cultural values conflict, econom- ic values prevail more often in their decision making. Most Native corporations invest primarily outside their regions. The population of Alaska grows at average annual rates of 3.0% in the 1980's, 3.5% in the 1990's, and 3.0% in the period from the year 2000 to 2020. 10-8 Analysis of Scenarios All of these scenarios have certain features in common. In all three, State policy follows a moderate growth path and emphasizes a balance between growth and lifestyle/environmental preservation. The State takes action to improve the transportation infrastructure; the State budget funds public works, some Perma- nent Fund income is used for development projects, and the State income tax is re-imposed around 1989. In all three, the State supports the fisheries, coal, and tourism industries. Tourism and fisheries are about the same size industries. Coal is sold to Japan/Korea and other Asian countries; hard rock minerals to the U.S. and Japan/Korea, seafood to Japan/Korea and the U.S. Beluga coal is in production, North Slope oi] is sold to Japan, the TAPS pipeline operates well into the next century, the Pacific Alaska LNG plant is placed into operation, and commercial production of oil and gas is generally allowed in the National Wildlife Refuge System. Quartz Hill ships molybdenum in the 1990's and a new, major mine opens in the Brooks Range. Bottomfishing becomes a major industry. The Knik Arm Crossing is completed. The Capital remains in Juneau. Energy, employment, and housing are major rural problems in all three scenarios; better insulation followed by new technology and the substitution of other energy sources for fuel oi] in the 1990's are significant approaches to the rural energy problem. While control of a Native corporation passes into non-Native hands in the 1990's, in general the Natives retain control, open their land to development, sell or lease their land to non-Natives, and invest primarily outside of their regions. However, the scenarios also differ significantly. Figure 10.2 summarizes some of their features with an emphasis on their differences. 10-9 Figure 10.2 SCENARIO COMPARISONS ITEM / ISSUE / PROBLEM LOW POPULATION SCENARIO Long-run oi] prices MODERATE POPULATION SCENARIO HIGH POPULATION SCENARIO At least at current level State goals State actions Economic qrowth, jobs Drop, but then rise above current level Economic growth, diversi- fication, maximizing resource development Developing transportation infrastructure, increas- ing investment and finan- cial incentives, making land available State budget emphasis Public works Permanent Fund income Split between aeneral State budget and develop- ment projects Developing transportation infrastructure, increasing investment and financial incentives, coordinating development, making land available Public works and resource development Split between general State budget and develop- ment projects 10-10 Rise substantially above current level Economic growth, di- versification, jobs Developing transportation infrastructure, developing inexpensive power, making land available Public works and resource development Development and infrastructure support Figure 10.2 Scenario Comparisons (continued) ITEM / ISSUE / PROBLEM LOW POPULATION SCENARIO MODERATE POPULATION SCENARIO State income tax Restored 1989 Restored 1988 HIGH POPULATION SCENARIO Restored 1990 Industries receiving State support Fisheries, coal, tourism Fisheries, coal, tourism, oil & gas Fisheries, coal, tourism, oi] & gas Industry size relative to tourism Fisheries, same size; coal, mining, timber all 1/3 size; agri- culture, 1/20th the size Fisheries, coal, mining, all same size; agriculture, 1/2 size North Slope oi] to Japan 1990 1987 Pacific Alaska LNG plant 1995 1993 Beluga coal in production 1990 1995 National Wildlife Refuge Oil and Gas production early 1990's Fisheries, coal, mining, all same size; agriculture, 1/2 size. Coal and mining grow even more past 2000 1988 1990 1991 early 1990's early 1990's 10-11 Figure 10.2 Scenario Comparisons (continued) ITEM / ISSUE / PROBLEM LOW POPULATION SCENARIO MODERATE POPULATION SCENARIO HIGH POPULATION SCENARIO Quartz Hill in production early 1990's early 1990's early 1990's New, major mine in the early 1990's mid 1990's mid 1990's Brooks Range Knik Arm Crossing completed late 1990's mid 1990's mid 1990's Susitna - 1st dam completed Project abandoned late 1990's 1995 Alaska Railroad to the U.S. Not extended 2000 2000 Alaska Railroad to the Not extended 2000 1995 Brooks Range Road to Nome Not built 2000 2000 Petrochemical markets None None Japan/Korea & U.S. Regional power grids in No Yes - by 2000 Yes - by 2000 rural Alaska 10-12 Figure 10.2 Scenario Comparisons (continued) ITEM / ISSUE / PROBLEM LOW POPULATION SCENARIO MODERATE POPULATION SCENARIO HIGH POPULATION SCENARIO Values Native corporations favor Cultural over economic values Economic over cultural values Economic over cultural values Native corporations as No Yes No consensus unified political force Population growth rates: 1980's 1.7% / year 2.5% / year 3.0% / year 1990's 1.1% / year 2.0% / year 3.5% / year 2000-2020 1.0% / year 1.5% / year 3.0% / year 10-13 APPENDIX A THE DELPHI PANEL Ky THE DELPHI PANEL This list represents the members of the Delphi panel who responded to one or more rounds of the questionnaire process. Biographical data has been obtained from either the panelist or a source within the panelist's organization. Again, we sincerely thank them for their hard work and dedication to The Delphi Study. DR. VERA ALEXANDER Professor/Director, Institute of Marine Sciences, Dean of the College of Environmental Sciences, University of Alaska, Fairbanks. University of Wisconsin, B.S., M.S.; University of Alaska, Ph.D. ROBERT ATWOOD Publisher/Editor-in-Chief, The Anchorage Times. Chairman of the Alaska Statehood Commission. Norwegian Consul in Alaska. Board of Directors, American Polar Society and the National Municipal League of Alaska. G."SAM" BEST Administrative Office/Director of Planning and Enginnering, Kenai Peninsula Borough. Former Mayor, Kodiak Island Borough. Former Chief Cadastral Surveyor, State of Alaska. ALVIN 0. BRAMSTAED, JR. General Manager, KTUU-Channel 2/NBC for Alaska. President, Anchorage Associated Broadcasters. Past president, Advertising Federation of Alaska. DR. MAX BREWER Chief of Operations, National Petroleum Reserve/ Assistant Director of Alaska Programs, United States Geological Survey. Former Alaska Com- missioner of Environmental Conservation. EUGENE BROWER Mayor, North Slope Borough; former NSB Director of Public Works. President, Barrow Whaling Captain's Assn. Former Chairman, Alaska Eskimo Whaling Com- mission WILLIAM CHABOT General Manager, Tlingit-Haida Electric Authority. Former General Manager, Ontonagon Rural Electric Cooperative, Ontonagon, Michiqan. FRED CHIEI Field Office Director, United States Department of Energy. Anchorage Municipal Assembly member. Former president of the Anchorage City Assembly. A-1 Delphi Panel (cont.) BILL COGHILL DENNIS COOK JOHN COOK MARY LOU COUCH JOHN DAPCEVICH DR. T.NEIL DAVIS GEORGE DAY Planning Manager, Alaska Railroad. Retired Army Chief of Staff, Army Forces in Alaska. Former Alaska representative for the United States Department of Transportation. Member, Alaska Land Use Council. ‘ Partner, law firm of Schaibel, Staley, Delisio, and Cook (Fairbanks). Former Acting Director, Alaska State Department of Community and Regional Affairs. Former Executive Director, Fairbanks Centennial Exposition. Superintendent of the Great Smokey National Forest. Former Regional Director for Alaska-National Park Service; previously served as Associate Director for NPS national operations. Account Executive, E.F. Hutton. Former Vice- President and Chief Economist, Alaska Pacific Bank. Business columnist for the Anchorage Daily News. Member of the Royalty Oil and Gas Development Advisory Board. Mayor of Sitka since 1971. Former Chief Accountant, Alaska Territorial Government. Member, Alaska Statehood Commission. Responsible for drafting the original Sitka Economic Development Plan. Retired director of the Geophysical Institute, University of Alaska, Fairbanks. Current member, Alaska Council on Science and Technology. University of Alaska, '55, B.S.; California Institute of Tech- nology, '57, M.S.; University of Alaska, ‘61, Ph.D. Public Affairs Manager, former Kenai Refinery manager, Chevron U.S.A. Former member of the Kenai Chamber of Commerce and the Kenai Peninsula Borough Development Committee. Vice-Chairman, Government Affairs Committee, Alaska Oi] and Gas Association. A-2 Delphi Panel (cont.) H. NOBLE DICK DR. 0."GENE" DICKASON CHARLES H. DICKEY LARRY DINNEEN DICK DWORSKY GEORGE EASLEY PAULA EASLEY KENT EDWARDS President, Bristol Bay Native Corporation. University of Alaska, B.A.; Wharton School of Business, University of Pennsylvania, M.B.A. Director, School of Engineering and Professor of Environmental Quality Engineering, University of Alaska, Anchorage. Former Director of Alaska Operations, Environmental Protection Agency General Agent, Allstate Insurance Company (25 years in Alaska). Director, Western Alaska Council, Boy Scouts of America. Former Executive Vice-President, Arctic Slope Regional Corporation. Former Vice-president, Innova Corporation, Seattle. Former lobbyist, Associated General Contractors, Alaska. Chief of Planning and Environmental Coordination, Bureau of Land Management. Former Director, Alaska State Water Study Committee. President, George Easley Company-General Contractors. Alaska representative, Dow Chemical Company. Chair- man, Alaska State Chamber of Commerce. Member, New Capital Site Planning Commission; past president, Anchorage Chamber of Commerce. Executive Director, Resource Development Council, Inc. Member, National Public Lands Advisory Council. Member, International Trade Commission Alaska Export Council. Former member, Alaska State Centennial Commission. Partner, law firm of Hartig, Rhodes, Norman, Mahoney, and Edwards. President of CommonSense for Alaska, Inc. Former Alaska State Attorney General. A-3 Delphi Panel (cont.) DR. RICHARD ENDER TOM FINK WALT FURNACE RON GARZINI 0.K."EASY" GILBRETH DR. 0."SCOTT" GOLDSMITH LLOYD HAMES GOVERNOR JAY HAMMOND C.C. "CHUCK" HAWLEY Associate Professor of Public Administration, School of Business and Public Administration, University of Alaska, Anchorage. Kearney State, ‘67, B.A.; Syracuse University, '76, Ph.D. Anchorage insurance executive. Alaska State House member, 1967-76. Republican candidate for governor, 1982. Alaska State Representative. Self-employed Finan- cial Consultant. Former Chairman of the Anchorage School Board. City Manager, Seward, Alaska. Former Chief of Operations, Municipality of Anchorage; former Staff Director, North Star Borough. Exploration and Production Affairs Manager, Alaska Oil and Gas Association. Board of Directors, Resource Development Council. Former Regulation Director, Alaska State Division of Oi1 and Gas Development. Researcher/Associate Professor of Economics, Institute for Social, Economic, and Government Research, University of Alaska. Princeton University, '67, B.A.; University of Wisconsin, ‘72, M.S.; '76, Ph.D. President, Hames Corporation (Sitka). President, Board of Trustees, Sheldon Jackson College. Treasurer, Alaska State Republican Party. Former two-term governor of Alaska; Alaska State House, 1959-64; Alaska State Senate, 1967-73. Former mayor, Bristol Bay Borough. Published author. Owner, Lake Clark Lodge. President, Hawley Resource Group, Inc. National Science Foundation Fellow. Member, Alaska Land Use Planning Commission. Former Executive Director, Alaska Miners Association. A-4 Delphi Panel (cont.) DAVID HEATWOLE R. DAVID HERRNSTEN DR. ARTHUR HIPPLER LLOYD HODSON BARNEY HOLLEMBACK ROY HUHNDORF CELIA HUNTER DAVID HUTCHINS President, Anaconda Mineral Company. Former Alaska Exploration Manager, ARCO Alaska. Past President, Alaska Miners Assn. Director, Alaska-Korea Business Council. Mayor, Kodiak Island Borough. Commercial fisherman. Member, Alaska Coastal Policy Council. Officer, United Fisherman's Marketing Association. Member of advisory committee, Kodiak Fisheries Technology Center. Associate Professor of Anthropology, Institute for Social, Economic, and Government Research, University of Alaska. University of California, ‘63, A.B.; '68, Ph.D. General Manager, Alaska Village Electric Cooperative. Former president, Alaska Rural Electric Cooperative. Secretary-Treasurer, Public Utilities Insurance Trust. President, ALAMASU, Inc. (Delta Junction seed farm). Former Matanuska Valley farmer. President/Chief Executive Officer, Cook Inlet Region, Inc. Director, Alaska Federation of Natives, Anchorage Chamber of Commerce, and Alaska Pacific Bank. Regent, University of Alaska, Anchorage. Retired owner/operator, Camp Denali; former member, Alaska Land Use Planning Commission. Past director, Alaska Conservation Society. Former Executive Director, Wilderness Society. Executive Director, Alaska Rural Electric Cooperative. Former Assistant Director, Western Farmers Electric Cooperative-Anadarko, Oklahoma. Ten-year member of the Oklahoma State Legislature. Delphi Panel (cont.) LINDA LORD JENKINS LELAND A. JOHNSON DENNIS JUREN GEORGE KRUSZ MARK LEWIS BYRON MALLOTT JOE MARKS AMOS "MO" MATTHEWS GOVERNOR KEITH MILLER Editor-in-Chief, Tundra Times. Former reporter, Anchorage Daily News. Former editor, Orlando Centinel Star, Orlando, Florida. Director, S.T.A.R., Inc. President, Arctic Slope Consulting Engineers, Inc. Former North Sea Project Manager for Brown & Root. Member, American Society of Civil Engineers. President, Tesoro Petroleum Corporation. Director, National Petroleum Refiners Association. Marketing Director, Canadian-American Petroleum Institute. President, Alaska State Chamber of Commerce. Past Executive Director, Kodiak Chamber of Commerce. Former Vice-President, Powell-Holmes, Inc. Alaska State Commissioner of Community and Regional Affairs. Former City Manager, Valdez, Alaska. Past president, Alaska City Managers Association. Chairman, Sealaska Corporation. President, Alaska Federation of Natives. Former Alaska State Commissioner of Community and Regional Affairs. President, Marks Engineering. Registered professional electrical power engineer. Chairman, Marenco-Alternative Energy. Member, Sigma Tau National Engineering Society. Deputy Federal Inspector for Alaska, Alaska Natural Gas Transportation System. Former Director of Research and Development, Alaska Department of Natural Resources. Chairman, Alaska Transportation Commission. Former Alaska State Governor; Alaska State House, 1963-65; Alaska Secretary of State 1966-69; Alaska State Senate 1972-75. A-6 Delphi Panel (cont.) ERNST MUELLER DR. CLAUS M. NASKE MARK NEWELL PAUL NORGAARD DR. PAT O'BRIEN DR. GLENN OLDS DR. DEAN OLSON JOHN O'NEILL Consultant, Environmental Services, Ltd. Former Alaska State Commissioner of Environmental Conservation; past president, Alaska Conservation Society; author of numerous professional papers on water quality and arctic environment. Associate Professor of History, University of Alaska-Fairbanks. University of Alaska, '61, B.A.; University of Michigan, '64, M.A.; Washington State University, '70, Ph.D.; widely published author and historian. President, Polarconsult Alaska, Inc.; author of The Wind Energy Handbook. President, Wind-Systems ngineering, Inc. Loyola, B.A.; Stanford, M.S.; P.E. Vice President, Alaska Policy Coordination, and former president of ARCO Alaska, Inc., Atlantic Richfield Company. Director, Anchorage Chamber of Commerce and Commonwealth North, Inc. Associate Professor of Economics, University of Alaska, Fairbanks. Auburn University, '67, B.S.;'69, M.S.; University of Oklahoma, '76, Ph.D. President, Alaska Pacific University. Former President, Kent State University and Springfield College (Mass.). Former U.S. Ambassador Representative, United Nations Economic and Social Council. Associate Professor of Finance, University of Alaska, Anchorage. Author of Financial Tools for Small Businesses with Omer Carey. University of Washington, ‘68, Ph.D. Agricultural Economist, Soil Conservation Service U.S. Department of Agriculture. Formerly with The Watershed and River Basin Planning Project, Amhurst, Mass. Delphi Panel (cont.) WILLIAM PARGETER WALT PARKER DON PENNER LLOYD PERNELA WILLIAM R. PERRY THOMAS R. PETERSON BLAINE D. PORTER DR. PETER PROBASCO RICHARD L. "DICK" RANDOLPH President, Food Services, Inc. (McDonalds). Vice-President, Anchorage Chamber of Commerce. Providence Hospital Advisory Board. President, Parker & Associates, Inc. Past co-chairman of the Alaska Federal/State Land Use Planning Commission. Former Alaska State Commissioner of Highways and former Anchorage City Assembly member. Director of Community Development, Bristol Bay Borough. Former building contractor. Former environmental specialist, Bechtel-Fluor, Inc. TransAlaska Pipeline Project. Self-employed transportation and resource development consultant. Former Director, Alaska State Division of Energy and Power Development. Former Associate Professor of Engineering, University of Alaska, Fairbanks. Former General Manager, Fairbanks Municipal Utilities. Planning Director, City and Borough of Juneau Alaska Director, U.S. Department of Commerce International Trade Commission. Foreign Service Officer serving in Washington, D.C., Taiwan, Japan, Korea and Liberia, U.S. State Department. Loan Examiner, Alaska State Division of Agriculture. Retired Associate Director, University of Alaska Cooperative Extension Service. University of Minnesota, Ph.D. Fairbanks Insurance Executive; Alaska State House 1970-74, 1978-82. Former teacher in Valdez and Naknek. Liberterian candidate for Governor, 1982. A-8 Delphi Panel (cont.) BILL RAY DR. DAVID REAUME ROBERT W. RETHERFORD ROBERT RICHARDS BRIAN ROGERS ILENE SACKETT ROBERT SANDERS JOHN W. SCHAEFFER Four-term Alaska State Senator (Juneau); Alaska State House, 1964-68; Chairman of the Legislative Council and Chairman of the Senate Judiciary Committee. President, Alaska Economics, Inc. Former Staff Economist, Board of Governors-Federal Reserve. Former Principal Economist, Alaska State Department of Commerce and Economic Development. Senior consultant, electrical technology. Former Arctic Vice-President, International Engineering Company. Vice-Chairman, Alaska Pacific Bancorporation. Adjunct Professor of Economics, Alaska Pacific University. University of Washington, B.A.; Stanford, M.B.A. Fairbanks store manager; Alaska State House, 1978-82; member, Alaska Statehood Commission; Director, Alaska Energy Center and Alaska Conservation Society. Director of Programs for Women and Men, Anchorage Community College. Former Chairperson, Alaska Women's Political Caucus. Member, Anchorage Municipal Health Commission. Former member, Governor Sheffield's Transition Team Self-employed consulting geologist. Former Sr. Geologist, Diamond-Alaska Coal Company. Former State Mining Manager, Alaska State Department of Natural Resources. President, Nana Regional Corporation. Former Commander, Alaska National Guard. Past chairman, Federal-State Land Use Planning Commission. A-9 Delphi Panel (cont.) HAROLD SCHMIDT THOMAS R. STAHR ARLISS STURGELEWSKI ERIC SUTCLIFFE ROBERT SWETNAM LOWELL THOMAS JR. PEG TILESTON FRANK TURPIN ARLON TUSSING Sr. Vice-President, ENSTAR Natural Gas Company and Alaska Pipeline Company. Twenty-nine years of experience in the natural gas industry. General Manager, Anchorage Municipal Light and Power. Former trustee, Northwest Public Power Assn. Director, Susitna Power Now!. Former director, Engineering and Operations, Virgin Islands Power and Water Authority. Alaska State Senate (Anchorage). Former Anchorage Municipal Assembly member. Vice-Chairman, Capital Site Planning Commission. Chairman, Legislative Committee, Alaska Municipal League. Owner/manager-Stormy's Restaurant, Unalaska. Alaska State House, 1980-82. Unalaska City Council, 78-80. Stanford, B.A. Alaska Executive Representative, Phillips Petroleum Company. Director, Resource Development Council, Alaska Land Use Council, and Alaska Oil and Gas Association. Retired Alaska State Lt. Governor. Alaska State Senate, 1966-70, past majority leader. Self-employed lecturer, author, film producer. Owner, Environmental & Resource Information Service. Director, Chugach Electric Association, Alaska Water Resource Board, and League of Women Voters. President, Alyeska Pipeline Service Company. President, Anchorage Chamber of Commerce. Chairman, 1983 United Way Campaign. Member, Providence Hospital Advisory Board. Economist/Consultant, Institute for Social, Economic, Government and Research, University of Alaska. A-10 Delphi Panel (cont.) JOSEPH USIBELLI ANTHONY "TONY" VASKA RICHARD WEAVER DR. TUNIS WENTINK LEW WILLIAMS DON WOLD DR. WILLIAM R. WOOD DON YOUNG President, Usibelli Coal Mine, Inc. Alaskan of the Year (1983). Director, First National Bank of Fairbanks. Alaska State House (Bethel). Assistant Director, Nunam-Kitlutsisti Corporation. Director, Yupik Language Center and Kuskokwim Community College. Stanford University, Anthropolgy, Ph.D. Alaska Operations Manager, EXXON U.S.A. Former Environmental Conservation Manager, EXXON Southeast Division. President, Alaska Oi7 and Gas Association. Director, United Way, Junior Achievement, and the Anchorage Chamber of Commerce. Professor of Physics, Geophysical Institute, University of Alaska, Fairbanks. Rutgers University, '41, B.S.; Cornell University, '54, Ph.D. Publisher/Editor-in-Chief, Ketchikan Daily News. Director, Resource Development Council. Lay-member, Alaska Bar Association. Past president, Petersburg Chamber of Commerce. Executive Director, Alaska Royal Oi1 and Gas Development Advisory Board. Former Assistant to the President, Universal 0i1 Products. Director, Crimestoppers, Inc. Executive Director, Festival Fairbanks '84. Former mayor of Fairbanks. Past President and Professor, University of Alaska, Fairbanks. Third-term United States Congressman for Alaska. Alaska State House, 1966-70; Alaska State Senate, 1970-73. Former mayor of Ft. Yukon, Alaska. Former educator and river boat captain. A-11 ite Original Cover Design by Karen s. Yaworskt DEPD-83-100-R39